Reasons To Be Cheerful?

It's a volatile world and trading is tricky to say the least. What can retailers do to improve their prospects?

Is it really that bad in today's retail environment? With two social enterprise store chains – HISBE in Brighton and Worthing and Locavore in Scotland – closing for want of funding and The Body Shop calling in administrators, you'd be forgiven for having a head-in-hands sense of desperation.

Research by the Local Data Company (LDC) found that 1,915 independent retail stores closed during the first half of 2023 marking the worst recorded net change for the sector since 2016 when it started collecting data.

Then Office for National Statistics (ONS) figures showed retailers suffered their worst decline in sales in nearly two years in the run-up to Christmas, when sales volumes slumped by 3.2% in December, the worst slump since January 2021 when Covid lockdowns affected sales.

So yes, you'd be forgiven for thinking the outlook is bleak. Retail has been subdued ever since the cost-of-living crisis kicked in, but how has it affected the independent health food sector, and what are our prospects for this year?

Recent positive news came when Healthy Stuff Group moved into the health food retail space with the acquisition of Natural Choice in Knaresborough and Demeter Health, Sandbach. Chairman Jason Wootton insisted that retail staff "talent and knowledge" was crucial to this move, which underscores the importance of training in the industry.

We spoke to two retailers who also sit at the top table in their respective national bodies to gauge what level of confidence might remain for our sector.

Cutting costs and speeding up information

Melanie Beard, Deputy Chair of Health Stores UK and MD of Best Health Food Shops (Kent and Sussex)

We do not have specific data on health store closures and openings, but overall we are seeing fewer new stores opening and more closures. We can see from the recent closure of HISBE that even longstanding, apparently successful stores are unable to survive the impact that the last four years have had on retail and our industry.

However, Health Stores UK has increased membership over the last year, albeit not significantly or as much as we would have liked! When stores are struggling financially and looking to cut costs, we understand that it is a considered decision to commit to another expense even if it is a valuable investment for every business.

However, we are constantly launching new campaigns, support, information, ideas and cost-saving deals which we hope will attract new members who can really see the value of joining the association. We believe that stores really cannot afford not to join! We are all in this together and we want to help stores thrive through these difficult times.

Times are difficult for all stores, and we at Best Health Food Shop are in the same boat as everyone else. Rising costs, volatile footfall and so on. However, our figures show that we are doing better month on month compared to the previous year in all our shops. It may only be a small increase but it is good to see it is going in the right direction.

We had a good Christmas and despite appalling weather the last few months' sales have been consistent. We do however rely heavily on the support of Health Stores UK as members. We carried out a big cost-cutting exercise last year in all shops and renegotiated all our insurance policies and card charges which has saved us thousands across the four shops.

We have also been taking full advantage of the business-focused webinars that are on offer from Health Stores UK which have helped us to rethink certain areas and we are currently taking up the recent offer of one-to-one business coaching with Dave Christie from Take On Goliath. These things have all contributed to keeping our business going as we know that we are not alone and that there is support and help out there.

We are currently trialling new software in our stores that gives us live information on exactly what is going on in all our stores at the touch of a button – this has proved to be really valuable as we can make quicker decisions based on up-to-the-minute information. Having this information helps us to feel more confident as we go into the spring and summer months.

While we are anxious about the rise in wages, rates and rents in April, we are trying to focus on the things we can control this year and keep on learning about our business. And taking advice, help and support where we can.

Positive outlook but training has suffered

John Frisby, Chairman of the Health Food Institute and owner of Food For Living, Dartford

Down here in deepest Kent, there are very few traditional health food shops left. I closed my second shop last Autumn but that was due to several factors – and slow sales was only one of them. The Dartford store has been showing a steady increase over the past year or so but the whole landscape of the town has changed in so many ways and there has been a huge influx of new people.

We are not hugely profitable but we're keeping everybody happy. I feel fairly positive for the coming months but providing a good service and having knowledgeable and helpful staff is key, particularly as we have an increase in new customers – first impressions are so important.

The HFI has been hit fairly hard. Obviously, training may be looked on as a luxury when funds are low. It is a shame that we don't follow the Irish example of ensuring all staff have a basic training (the HFI Part One Diploma) – customers want to talk to trained and knowledgeable staff.

Covid hit hard and really took all of the momentum from the HFI but thankfully there are retailers that see the value of trained staff and find the Diploma very useful.

We need an industry campaign to press the point that trained, knowledgeable staff are key. We periodically offer special deals via Mailchimp emails and we have a permanent half-price deal for members of Health Stores UK. As an industry, we may never be fully recognised by the establishment, but every trained worker provides another notch in the scale that the general public gauges.

Overall, I feel very positive about the industry but this is my 47th year in the business – for how much longer, I ask myself!