Budgens Gipsy Hill, London
This Budgens store enjoys an eclectic customer mix and coordinates stock accordingly. Nathan Kandiah speak to DRN:
How did the business start?
I am a co-owner and there are three of us family members. The other two already had some stores so there are now four in total, but this is the only one I am a part owner of.
We opened this store in April 2018. It used to be a tile shop but we thought it would be perfect for what we had in mind. We had been looking around for a while for the right unit to open as a Budgens store.
I would say 90% of our customers are local, and we had identified this was an area that was in need of a convenience store. There isn’t a train station in the area, so we don’t see a spike in footfall from commuters. It tends to be a steady flow of people, although the type of customer does change throughout the day.
What is your competition like?
There are a couple of smaller corner shops around here but really they have a different kind of offer.
People come to us for our fresh foods and we have an in-store bakery and cash machine. Plus we sell newspapers and lottery tickets.
You would have to go out of town to get to a bigger store – I would say the nearest is a Tesco, which is a few minutes’ drive from here, but people don’t always want to drive out to get groceries.
Did it take a while for sales to pick up and to attract footfall?
Sales have been going up steadily from the start, and we started off well anyway.
In the first few months we were netting £13,000 a week, and it has since gone up to more than £25,000 a week. We haven’t done any marketing or social media, so it has all been word of mouth.
Sales are going up due to a mixture of our customers coming more regularly and spending more, but also because we are seeing new people walk through the doors each week. There are still people who come in and say they live around the corner but they don’t normally walk this way so they didn’t know we were here.
We tend to see mums in the morning as there is a school nearby. They probably spend around £5 per head. Then we get the lunch crowd, and then from the afternoon we have a steady flow of people until we close at 11pm each day.
How do you keep customers coming back?
We really try to be as fresh as possible and also we want our prices to be reasonable.
From the start we monitored very closely what was selling and what wasn’t. It’s not a big store so it was important that we got the product mix right.
The area is a mixture with some affluent shoppers coming in but others looking for products at lower price points.
We have some unusual things in store such as some eastern European products, Biona Organic ranges and some free-from items. These sold well so we have kept them in. I would say I reorder these every three weeks and I order £200 of stock each time.
Initially our alcohol sales were fairly low and it was the other categories that seemed to be bringing people in, but we have now seen sales slowly go up, especially more recently.
We do well more wine and beer than spirits. Sales for spirits seem to be very slow.
Really fresh is our main focus. We have fresh fruit and veg, meat and bread from the bakery. These are the things that bring people into the store. We then make sure we have other things to match, so our BWS section has a range of products that people might buy with their fresh items.
What sells well in BWS?
We sell a good amount of craft beer and the large bottles of beer sell well. We have these on a permanent promotion at three for £5, which is pretty competitive. We sell more of those than the multipacks.
Also in beer, we do sell 12 and 24 multipacks but it’s the four-packs of cans that don’t really seem to shift much.
In wine we do well with the Secretary Bird range. They sell really well whether they are on promotion or not.
The cheap wine doesn’t sell so well – the wines at £4.99. Instead our customers tend to go for the ones nearer to the £10 mark, or between £5 and £10, so brands such as Campo Viejo do well, and some French wines.
We did have a range from Laithwaite’s, priced between £6.99 and £15 and we actually sold out of these but we don’t currently have any room to reinstate them.
We would like to give it a go again but we need to make some changes to our shelving in order to increase the space. It’s something we will do in the future.
We cut our range of pre-mixed drinks down to just six and these are the key sellers. So we have two G&Ts (one is pink gin), a Smirnoff & Cola, Smirnoff & Cranberry and also Pimm’s.
There is plenty of choice for us in this category but we have had to be picky because of limited space in our chillers.
Spirits are now picking up a bit, although sales are slow for these. Chekov vodka does well. Gin sales have slowed again. We try to keep prices down for the larger bottles so we only make 10% margin on these, and 20% on the smaller ones.
Do you run any promotions to help drive BWS sales?
There are some promotions on the Budgens leaflet that work for us, but we don’t do any separate ones particularly.
We don’t want to do promotions unless they are absolutely necessary. Really we try to find alcohol options that people can’t find elsewhere so that the price is not the factor.
For the first three weeks in this store we ran a sandwich meal deal promotion but then we stopped it because we just weren’t making any money, and we realised that people were coming in to buy those items anyway and price wasn’t a factor.
People are not coming here for promotions. They come here because they want to buy the things from their shopping lists.
What are your plans for the future?
We would like to open another store between the three of us, and then maybe more after that. We have started looking already but we are not in a rush. It’s important to find the right space. We don’t mind if there is competition there but we need to make sure the customers are there.
Our next one will probably still be a Budgens but we might add something different to the portfolio after that. With Costcutter for example we would have access to Co-op products. But Budgens has worked well, especially for our focus on fresh.