Case study: re-opening the Little Shop at Winchelsea

• Why the old business closed
• Taking up the challenge
• Re-opening the business
• The learning curve
• New challenges
• The future

The learning curve

Once the shop was opened, our major challenge became staff. It had been decided to employ staff rather than rely on volunteers, as it was felt that Winchelsea is too small to provide a pool of volunteers sufficiently large to be able to man the shop seven days a week.

Volunteers were used only to take the pressure off employed staff at critical times and to maintain links to the community. However, they play an important role. Those volunteers who man the till and put out the rubbish for collection are especially helpful, but the lady who organises the volunteer rota, Ann Dawson, is perhaps the jewel in the crown!

For the first few weeks, a mix of Management Committee members, other volunteers and part-time employees ran the shop. However, it rapidly became apparent that this approach was not sustainable. Fortunately, a new resident, Gennette Stevens, agreed to work full-time in the shop and was appointed manageress. Although Gennette had limited retail experience, having worked only in a local supermarket, she has proved to be a natural at dealing with customers and brought some useful ideas from her previous job. The shop could not have survived without her.

Given the lack of retailing experience of our staff, there is a critical need for training. We have arranged several formal courses for permanent members of staff: NVQ’s in retailing; Computer Literacy and IT; and the British Institute of Inn-Keepers certificate. Other formal courses are planned, including first aid; and self-defence. However, the greatest need is for practical hands-on training on the shop floor: handling customers, managing cash, checking cheques and banknotes, banking, stacking shelves, presenting fruit and vegetables, rotating stock, managing a stock room, cleaning and so on. Unfortunately, there are no courses of this sort available, despite the confusing plethora of training organisations. We have given some on-the-job training to staff but recognise the need to make this training more systematic, and to test and update that training.

Training has also been organised for the Management Committee. One members has gone on a training course (Introduction to Health and Safety at Work) and more are planned (health and safety assessment, and employment law) when money allows.

One of the most fundamental and insoluble problems for the Little Shop is its size. The shop floor is only about 200 square foot. We have been able to pack a wide range of goods into this limited space, but it makes it very difficult for staff to move around the shop, and between storeroom and shop, and to keep displays full, particularly at busy times of the year. Just three or four customers make a crowd. The awkwardness of filling up reduces productivity and means that it takes more staff than might otherwise be required to service the shop to the standard we want. Our staff overheads are accordingly very high (about 80% of costs).

The problem of space extends to storage (including waste storage). Our experience suggests that storage space needs to be of almost the same size as sales space. In the Little Shop, this is not possible, so we have had to have tailor-made shelving built. Wisely, we did not attempt this until we had some months of experience under our belt.

Although there is a Management Committee, the real management of the business has largely been undertaken by one couple in Winchelsea. The employed staff lack experience as managers, particularly the management of junior staff, and find it difficult to think of the business as a whole, which means that they need constant support and supervision. This begs the key question for the future: who will manage the shop when the two people currently driving the project step down?

Some pressure has been taken off the two key players by identifying and delegating regular marginal tasks to other Management Committee members. For example, members of the Management Committee look after health & safety, employment law and fire safety. Others help with the shop’s banking, returning newspaper vouchers to the wholesaler for redemption, and making cash payments to some local suppliers. This is all very helpful but members of the Management Committee will have to take on direct managerial roles in the future if the shop is to survive into the long term and standards are not to deteriorate.

When the shop was re-opened, we thought we had a business strategy. In retrospect, we can see that, although we had identified key elements, we had not put them together in a coherent business plan that provides a basis for action. In fact, we were only able to pull together a realistic business strategy after about a year, when we knew enough about the business to be able to rationalise what we had learnt from experience.

The essence of our discovered strategy is to pleasantly disappoint expectations about small shops. From experience of other small shops, many people walking into the Little Shop for the first time half-expect it to be dirty, dingy, poorly stocked and unfriendly. What they find is clean, bright, well-stocked and friendly. People respond well to the surprise, especially when they discover that we are community-owned.

However, the image is not easy to maintain. It is driven by attention to detail, eg making sure all parts of the shop are cleaned regularly, that displays are kept topped up and tidied, that the counter area is kept clear, and so on. A sense of style is also essential to ensure that goods are displayed properly and not crammed into the most convenient space. Unfortunately, neither of these qualities is particularly common or easily taught. All too often, such qualities are dismissed as nit-picking and obsessive. This is where members of the Management Committee have to exert strong control.

Another key element of our business strategy has been the range and quality of stock. When the shop opened, there were about 450 bar-coded items. Within two years, this has risen to over 1,500. The wide range has allowed the shop to be more than just a convenience store for top-up shopping. It has been able to offer an alternative to local supermarkets for regular shopping. This is evident in the frequency of individual purposes of up to £60 each.

One trap we have tried to avoid is stocking too many varieties of the same product. This is what supermarkets offer. Small shops cannot and it has not proved necessary anyway.

An important contribution to the success of the Little Shop is local produce. The importance of local produce has become increasingly apparent. Local produce ranges from fruit and vegetables to honey. It is popular with both locals and visitors, differentiates the shop from supermarkets and simply tastes better. The only problem has been finding local suppliers and the tendency of the smallest suppliers to move on. We are lucky to have an excellent local bakery (Rye Bakery) who delivers six days a week.

Fresh fruit and vegetables have been key to the general success of the shop. We have a very good local wholesaler (J&F Fruiterers of Rye Harbour) who delivers six days a week. The challenge with fruit and vegetables has been training staff to set out good displays, weed out wilting produce and avoid wastage by over-ordering.

A long-term challenge for the Little Shop is the misperception that prices in small shops are more expensive than supermarkets. This is carefully nurtured by the massive marketing budgets of the supermarket chains and unfair pricing practices such as the subsidisation of ‘know value items’ (KVI’s) - -- those relatively few goods such as milk and bread for which customers know the price. In fact, supermarkets achieve far higher margins than small shops by more than recovering their subsidies on KVI’s by hiking the prices of other goods and by using their monopoly powers to squeeze their suppliers. Most customers know this, but all too often succumb to the convenience of the one-stop shopping offered by supermarkets, despite the fact that most people hate shopping at supermarkets.

Pricing is a two-edged problem. We often find that we are charging too little compared to supermarkets. It is important for margins that prices are regularly reviewed and compared. We have also discovered that some prices are inelastic. For example, cigarettes are mainly bought casually by passers-by, who tend to be price-insensitive.

One of the most unexpected and unpleasant problems to face those running the Little Shop has been whispers of dishonesty about members of the Management Committee. It would seem that the ‘whisperers’ cannot understand why anyone would devote so much time and effort to a community project without getting some recompense. They certainly do not have much of a grasp of the economics of small shops. There was no comfort in the discovery, when we were asked to advise another village shop project, that this problem is not exclusive to Winchelsea.