Like delicatessens, farm shops and farmers' markets used to be very much the preserve of Home Counties yummy mummies and Guardian-reading foodies. But with the rise of local food their appeal has broadened unlike the delicatessens'.
There is very little data available, but the latest figures from Big Barn, the virtual farmers' market, shows that the number of farm shops that have signed up to the site over the past year has increased from 976 to 1,028 (5.3%), while the number of delis has slipped from 547 to 540 (1.3%).
ONS/Verdict Research data paints an even bleaker picture, showing that the number of delicatessens, cheese shops and chocolatiers fell from 1,592 to 1,373 (13.8%) between 2004 to 2009 (it doesn't measure farm shops).
The recession appears to have hit the more overtly upmarket delis harder than their seemingly humbler (though in reality sometimes similarly priced) farm shop cousins. So has the deli had its day? Or will shoppers flock back once they've got a bit more dosh in their wallets?
On the face of it, things are not looking good. There have been a number of high-profile casualties over the past year or so. McLeish Brothers, the upmarket chain of Scottish delis, fell into administration in January last year; Farmers City Market was bought out of administration in January last year, but collapsed again in November; Natural Kitchen, set up by two former Asda bosses, went into pre-pack administration this January; and Whole Foods Market, perhaps the grandest deli of all, closed its Champagne and oyster bar last November and started selling ready meals in an overhaul of its UK strategy.
One supplier, who asked not to be named, is succinct in his assessment of the sector's performance: "Shit".
"I don't think a single one is doing well," he says. "The consumer mindset has been changed forever. Consumers are now much more demanding about value. In the past when customers went to a delicatessen they were prepared to pay a premium for the ambience and the type of retailer that it was. There is still a small percentage of fair-weather customers, but the majority are now saying 'no' to premium."
He doesn't believe the outlook is likely to improve. "No one expects it to get better anytime soon. Before, retailers were saying that when the economy perked up again people would come back, but they're not expecting that any more and they've accepted that they need to change."
Others, however, are more optimistic about the sector's prospects. They argue that while some delis have stuck their heads in the sand, others have done everything they can to adapt to changing market conditions and tastes.
Bob Farrand, director of The Guild of Fine Food, points out that contrary to expectation, the recession hasn't accelerated the decline of the deli. "Statistics show that we haven't seen any more delis go under than prior to the recession, and those that do is mainly because they fail to adapt to current marketing needs," he says. "Those that are doing well have diversified into catering, or more importantly a café/restaurant offer. In effect, they work on ways to improve footfall and most younger consumers are happy to go into a deli for a good coffee."
It's certainly a model that's worked for East Sussex-based deli and restaurant operator Bill's Produce Store. Trading at its two stores in Lewes and Brighton is up on last year and owner Bill Collinson plans to capitalise on this by opening a new shop in Reading next month, and one in Horsham, West Sussex, in the summer.
Lewis & Cooper, a 110-year-old fine food store in Northallerton, North Yorkshire, is also hoping that by ringing the changes it will emerge from the downturn stronger. It reported a loss after tax of £99,960 last year amid "much more difficult than anticipated" trading conditions. But rather than be cowed into scaling back its operation, the retailer chose instead to invest in its business, opening a new store and a production warehouse last year as well as investing in its online business.
Much has been made of the supermarkets' incursion into deli territory and the inability of the latter to compete on price. And there's no doubt it has been an issue for many, one that has been compounded by the fact that in the downturn suppliers that had previously vowed never to list in a multiple have been forced to bow to the inevitable, leaving delis unable to offer exclusive products.
"The result has been that many core products that independents have stocked for years and made a lot of effort to sell are now available for 25% less in supermarkets," explains Ben Watson, who co-owns and runs the Riverford Farm Shop.
The price the supermarkets sell a product at is often cheaper than the price available to the deli at wholesale, adds another source, and some store owners buy goods from supermarkets to sell in their own stores. However, he adds, suppliers are now more willing to drop their minimum order criteria to allow indies to make smaller orders. Some have also been canny enough to adapt their promotional strategies. Cereal company Rude Health ran a winter porridge campaign that helped it increase its sales though independents by 104% in the six months to February.
It's not all about price, however. The one thing delis offer that most supermarkets don't is ambience. The best-performing stores are those that have created an oasis of calm for shoppers to forget their economic woes, with a positive atmosphere and a sense of theatre, says Paul Hargreaves, owner of fine food wholesaler Cotswold Fayre. Conversely, those that have remained overly cautious, slashing stock and in turn creating a "tight vibe", have struggled, he says.
Taking a leaf out of the farm shop's book and stocking plenty of locally produced food is another surefire winner a recent IGD survey suggests 30% of shoppers specifically purchased locally produced food in the past month. Quality is also key.
"Consumers cite high-quality ingredients as the most important factor when it comes to paying more for something, and these are products that they expect to find in independent delis," says Jo Metherell, marketing manager for fine food distributor RH Amar. "The interest and demand for locally grown products has continued as an increasing number of consumers commit to supporting their local economy."
Paradoxically, the delis that play on their local credentials could actually broaden their appeal. Those that continue to focus on expensive luxury items will struggle, warns Riverford's Watson. The market is already niche, but could become more so, he believes. "It is hard to see the independent sector doing anything other than decline into a niche serving only the very rich, obsessive foodies and special diet markets," he says. "There will always be a place for the barrow boys, but competing in the middle ground will be difficult."
Not impossible, however. And the delis that combine the right environment with the right offer one that doesn't duplicate what the local supermarket sells will not just survive, they'll thrive.