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The chance to achieve overall margins of 35% is one any retailer would jump at, but is such a model the preserve of stores in trendy urban areas? Multi-award-winning retail group Eat 17 doesn’t think so, and it has been its mission to prove this with its fourth store, which arrived in the market town of Bishop’s Stortford three months ago.
“It is a new territory for us,” says the group’s co-founder James Brundle. “We’ve taken a model which is already successful in London where there are lots of young people who are searching out the latest food and drink trends. Bishop’s Stortford is smaller and the diverse customer base of office staff, retail workers and local residents presents a new set of challenges.”
In fact, the challenges were so different to those James had faced before – his high street competitors include a Tesco Express, Greggs, McDonald’s and more – that he thought twice about taking on the site at all.
“We’re facing big competition here but the research I did makes me certain we can be successful. We spent months researching our competitors and speaking to residents,” says James.
Nine months of planning and research led to a strategy which uses some of the experiential retail elements that have made the Eat 17 team famous, with a greater focus on traditional convenience than perhaps has been required from the stores before.
The 5,500sq ft Bishop’s Stortford store therefore combines services and products from the existing Walthamstow, Hackney and Whitstable shops, such as bread from local bakers, Eat 17-branded ready meals and even a florist. Where other Eat 17 stores have had burger bars and pizza ovens, Bishop’s Stortford boasts on-trend street food-style stalls serving lunches, dinners and even offering locals takeaways through Just Eat.
And each comes with its own street food style branding: Chihuahua’s for Mexican food, the Italian-themed Col’s Kitchen and Katsu Charlie’s provides Japanese cuisine.
“I know the owners who run our street food stalls personally as I lived in the area for 15 years. These cuisines are on-trend and aren’t currently available around here. The addition of a seating area makes us popular with nearby workers on their lunch because the Greggs doesn’t have one.”
James gives the chefs full control of their range, pricing and staff. The subsequent lower costs aren’t the only ways James is achieving his margins of 35%, however. The shop has provided the budding restaurant owners with their first fixed sites and the advertising of its location on Just Eat and social media websites Facebook as a result introduces new shoppers to the store.
Other opportunities to drive up margins can be seen in the store’s layout. More than 30% of the shop also consists of fresh, with chilled, alcohol and bread making up nearly half of the store’s overall business. The store has brought a fishmongers to the high street for the first time in years too, while James also works with 22 local suppliers such as Pye’s Farm and Borough Wines. These sit alongside specialist items such as locally-ground turmeric, saffron and coriander, plus Eat 17-branded jars of Chorizo jam, and staff use sampling platters across the shop floor help convince budget-conscious customers the expense is worth it.
“The area has such a diverse range of shoppers which include the elderly and school children,” says James. “Some customers will want niche products, some won’t and others will want a mix of both. Our average basket spend per customer is £7 and I believe the range helps us achieve this.
“Some will already know we offer specialist products, but there are others who won’t. They’ll see the Spar sign outside and may just come in for a bottle of water, but they’ll then be surprised when they walk in and see the niche products or the street food stalls spread out across the store. Sampling platters or tasting sessions we hold will give them a flavour of what we offer. They’ll be persuaded to look around and may spend more. It works the same way when shoppers think they’re just visiting the food stalls to pick up their Just Eat orders.”
And more than in the other Eat 17 stores, PayPoint, scratchcards or lottery tickets require focus. “We focus on point of difference, but we can’t ignore areas which we know are successful.”
With two new store openings planned for 2018, the slow-but-imperious march of Eat 17 looks set to continue. “The new Bishop’s Stortford store is giving me the confidence we can carry on our momentum. We are offering new services to a new customer base so there is a lot at stake as a result,” says James. “I wouldn’t have done so much research or opened it if I wasn’t confident it would work and it’s on track to perform just as well as our other stores.”
And his success lays down a challenge to other store owners who might think such innovation and profitability wouldn’t work in the suburbs. “Opening this store shows me our business model can work outside of a trend-setting city like London or Manchester.”
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