1 August 1997

FARM SHOPS RECIPES FOR SUCCESS…

Farm retailing is enjoying renewed interest as UK agriculture faces a less certain future. We explore the promise and the pitfalls of using retailing to diversify income. Suzie Horne begins with a look at research designed to answer a key question

WHAT makes a successful farm shop? In a bid to provide a blueprint for the future, researchers at the Royal Agricultural College, Cirencester, have undertaken a comprehensive survey of UK farm shops.

Researcher Ruth Williams set out to identify the reasons for setting up a retail operation, who it employs, the product ranges offered, customer attitudes and any other enterprises aimed at attracting the public to the farm.

Information was also sought on whether the business was growing, static or in decline, how much information was offered to customers, and the type of building occupied by the shop.

Competitors were also identified and owners of shops which had closed down were asked to give an insight into the reasons for the failure.

The energy and enthusiasm of the responses, as well as the rate of the response, was very impressive, according to Scott Andrews, supervisor of the research.

More information

"We had a 75% response rate to a postal survey, which is very good. In addition to answering the survey questions, people often wrote letters giving more information," he says.

Of 229 farm shops listed in the Farm Retail Associations 1988 membership, 148 were included in the final survey. The number was reduced from the original list for several reasons, the main one being the closure of shops, others had been sold or the nature of the business had changed.

"We used a 1988 list because we wanted to see what makes a winner, so we needed to know that they had been established for some time," says Mr Andrews.

The reason for setting up most shops was to boost income, followed by creating employment for the family, better use of resources and, for some, the challenge and fun of the venture.

Surprisingly, 68% of respondents were male, according to Mr Andrews. It had been expected that most people running shops would be female. More than 70% had employed family labour in the shop at the outset, and a small proportion had since taken on more family labour. But 35% had cut the amount of family labour.

Identifying why a shop is successful is difficult, although it is possible to find some pointers. Location is the most important factor, especially in relation to the nearest major route, says Mr Andrews. "How far is the site from the roadside, how easy or difficult is it to see and find – what is the signposting like?"

Vital ingredients

In response to questions on the success of the shop, the range of produce, quality, price, age of the shop and the presence of a farm attraction were all mentioned. Of the 34% which reported their business to be growing, 80% offered some other form of attraction on the farm.

Overall, 63% of respondents had some other farm attraction, including tea rooms, pony rides, a picnic area and nature trails.

Half the shops sold more than 50 different product lines, and there seemed to be a link between wide product ranges and the success of the shop. But there was a desire to keep product ranges farm orientated.

"We asked whether they were actively promoting their produce and telling customers how it was produced. In 80% of cases, customers were able to see the origins of the produce in the shop, and we found that the whole farm experience was what people were coming to a farm shop for," says Mr Andrews.

"Half of customers expressed an interest in welfare aspects such as stocking rates and there seems a genuine desire to inform the public about farming methods."

Labelling was also important, especially to inform customers about production methods and where appropriate to signify that the produce was local or home-made.

A theme of popular words ran through the responses. "The words which cropped up most often were home-made, farm or farmhouse, local and quality.

"Its all about image building. What people want to create in their farm shops is a "Darling Buds of May" image of plenty."

Reasons given for the closure of farm shops included lack of time, planning and profit – common factors behind the failure of other diversification enterprises.

Planning is essential

Consultants warn against people getting carried away with enthusiasm and rushing into a venture which they do not really understand. The secondary danger is that, without effective planning, not only may the new enterprise get off to a shaky start, the core business can suffer too. That is because so much management time is being devoted to the new baby.

Supermarkets pose the greatest threat to 70% of farm shops. 22% in the survey included other farm shops as their main competition.

For well run businesses, the outlook seems optimistic, says Mr Andrews. "Farm shops can work and compete in the supermarket age – we might even see slight growth in the sector, prompted by the current interest in quality and traceability.

"But if you are going to make a winner out of a farm shop, you need to put in a lot of time. And that is a variable that isnt easily costed." &#42

The RACs Ruth Williams and Scott Andrews discuss the surveys findings with Glos farmer and retailer Rob Keene of Over Farm Market. OFM is run as a collective market for several farms in order to reduce costs. Left: Ruth Williams uncovered a link between big product ranges and shop profits.

RAC Farm Shop Survey

&#8226 90 of 148 respondents started a farm shop to boost income

&#8226 other reasons included creating employment for family and to make better use of resources

&#8226 68% of respondents were male

&#8226 63% classed themselves as having a farm shop, 22% as a shop on a farm, the rest termed the venture a farm store, or nursery shop

&#8226 Of the buildings used: 28% were purpose-built, 23% were a barn with shop–type installation, 13% used barns, 9% used a shed or outhouse, 3% a stall and 19% used other buildings such as a portakabin, prefab or stable

&#8226 Only 5% sold solely farm produce, 5% had none, 45% had sold up to 50% farm produce and 45% sold between 50 to 99% farm produce

&#8226 Those reporting a growing business identified the reasons as being a large product range, quality produce, price, age of the shop and the presence of other farm attractions

The postal survey, conducted in the first six months of last year, included 148 shops and attracted a 75% response rate.

Putting success on a plate requires thorough planning, according to catering consultant Anne Sugden. Pictured with her, is Christopher Hindley, the owner of the Gisburn County Stores and Diner, Lancs.

Select high quality products; offering items which can be bought anywhere limits profits, warns Anne Sugden. Christopher Hindley and general manager Jackie Robinson make a point of selling home-made ice cream.