Case study: re-opening
the Little Shop at Winchelsea
Re-opening the business
The new freeholder of the Little Shop building
undertook a major refurbishment of the premises. In this respect,
the fire in September 2001 proved to be a cloud with a silver
lining. It presented the opportunity to clean up, re-model
and redecorate the premises, and insurance money paid for
much of the work. After refurbishment, the shop was unrecognisable:
clean, bright and re-equipped.
Unfortunately, the Association had to pay
for some of the repairs to the fabric of the building which
were really the responsibility of the freeholder. This was
necessary in order to ensure that they were done to the required
standard.
The Association also had to pay for the
re-fitting of the shop. This created a major cashflow problem
as the re-fitting had to be paid for before committed funds
came on stream. The problem was resolved only when a member
of the Management Committee made a series of substantial bridging
loans. The Countryside Agency helped with an advance payment,
but subsequent installments were unhelpfully spread over a
year. Subscriptions, loans and donations became available
only after the shop had opened.
Re-stocking the shop was a major headache
as it had to be done from scratch and none of those involved
had retail experience. A couple of wholesalers offered to
re-stock but we were advised not to use them because of the
risk that they would offload stock close to sell-by dates.
In the end, we relied on housewives’ intuition. This
proved quite successful.
In selecting stock, we were very conscious
of the principle of know your customer. On this basis, a key
decision was not to stock wholesalers’ own brands, which
usually look tacky, and to avoid the discount end of the market.
Winchelsea is a relatively high-income area, reflecting the
large proportion of retired people and second homes, and the
level of house prices. Effort was put into finding higher-margin
speciality products, particularly from local sources.
The old business had relied for the bulk
of its general grocery supplies on weekly visits to the local
cash-and-carry, but it was felt that the shop could not afford
the time for weekly visits or be limited to the poor selection
of goods carried by the local cash-and-carry. New suppliers
had to be found and new accounts opened. Fortunately, once
the shop opened and gained a reputation, good suppliers started
to find us.
With no trading history, the opening of
new accounts for the new business, at least with larger suppliers,
was cumbersome and time-consuming. None of the suppliers understood
the nature of an IPS and those that bothered to check with
the FSA were seriously confused by the answers they received
from the regulator. In the end, personal guarantees had to
be extended to a number of suppliers by a member of the Management
Committee.
Opening banks account could also have been
a major problem because of the very bureaucratic money-laundering
regulations. Fortunately, the NatWest Bank manager in the
nearby town of Rye, Tim Brown, volunteered to join the Management
Committee and look after our bank accounts. NatWest also provided
a grant of £100 and 18 months of free banking.
A major decision was made not to deliver
newspapers. It was judged that the huge effort required, and
the need to extend and collect credit, were not worthwhile.
In a compact village like Winchelsea, it is no great inconvenience
to walk to the shop for a paper and making customers come
to the shop produces other sales. We have never regretted
that decision.
Another important retailing decision was
opening hours. Most small shops are open for long hours. However,
it was judged that passing trade was not going to be important
in Winchelsea and it was noted that only a small proportion
of the population commuted any distance and would therefore
require early and late opening. Opening hours were fixed at
08:00 to about 5:00pm on weekdays and Saturday, and 09:00
to about 5:00pm on Sundays and Bank Holidays. Opening hours
are extended to 5:30pm in the spring and summer. Subsequent
experiments with later hours have proved the original decision
to be the correct one. On the other hand, the shop opens every
day except Christmas Day, Boxing Day and New Years Day, and
closes for a half-day on Christmas Eve and for stock-taking.
The Little Shop finally opened its doors
on Friday, 8th February 2002.
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