After months of trying to absorb rising costs, it seems that everyone is now putting their prices up.
We’ve seen fresh items go up in price and I’ve just been informed by our fresh cakes supplier that their prices will be increased significantly in March. So far, they have been absorbing the costs themselves, but with the price of butter tripling over the past year or so, they’re now having to put prices up.
And it is the same for us. We aim to absorb as much of the margin as possible, while also ensuring our business is sustainable. That doesn’t mean that every product needs to go up, though. We’re trying to raise prices where there is room to do it – so Branston Ravioli and Macaroni Cheese are increasing this week by 10p and 5p, respectively.
We’ve never been a business that’s put an arbitrary margin in place – such as, we must make 40% on every product – so it’s about finding the opportunities to profit where we can.
Find out more: How to maintain your margins during the cost-of-living crisis
A great example is Pot Noodles, which we had on a promotion of two-for-£1.50. My wife and I went into town and saw that Poundland had them on at £1 each, so we have decided to price match to their promotion instead. We stocked up while we could and this allowed us to keep Pot Noodles at £1 even after the promotion had ended.
Independents have had some real advantages over the next few months. On the one hand, customers are shopping little and often. I overheard an older customer asking ‘what do we need to buy before our shopping is delivered later today?’ This gives us the opportunity to sell other items such as £1 handwash bottles, increasing basket spends.
I’ve also heard customers talk about how Lidl and Aldi’s prices are going up, so they might as well shop locally and save time and transport costs at their convenience store.
One thing that helps us compete is the fact that we have trolleys for customers to use. We were originally a bit wary of this idea when our regional development manager suggested it, but we started offering them for customers three Christmases ago and haven’t looked back.
If our customers want to pick up a larger format, for example – my team are trained to help them take their shopping to their cars. I used to work for Vodafone and know how important customer service is. All of my team is trained to remember our regulars’ first names, tell customers about new products or promotions and offer any assistance they might need.
In a cost-of-living crisis, great customer service doesn’t cost anything, but can be a point of difference that keeps the community coming back to their local store.
Read more of our expert opinion on the independent retail sector
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