How to run a Super Deli!

Delicatessen

De Beauvoir deli offerings.

A delicatessen can take many shapes and sizes from a small high street shop or deli café to an out-of-town food hall with a deli counter. According to Mintel, 10.95% of consumers polled used a deli in the last three months, while specialist food and drink retailers, which include delicatessens, saw their sales increase by 1.5% to £10.6 billion in 2015. The Association of Convenience Stores found that specialist food stores were fifth out of twelve categories of shops having a positive impact on the local area and represented the top most wanted shop service within a community. So given this scenario, what should deli owners do to satisfy demand, improve their turnover and keep ahead of the competition?

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Matt & Steve at the Pistachio & Pickle cheese counter.

Knowing your clientele is vital and this depends on location and season with different challenges facing delis located in rural versus urban areas. Islington's Pistachio & Pickle comprises a deli/brunch café and a separate artisan cheese shop with wine section plus eat-in and food-to-go options which vary according to the season. Owners Matt Kelly and Steve Cooper describe how their location affects footfall at different times of the day. "Most people walk to the deli and don’t need to rely on resident-only parking permits. Our customer flow changes constantly, starting with early morning commuters; then mums returning from the school run and locals having weekday brunch. After that, neighbouring businesses and home workers constitute most of our lunch trade, before the afternoon lull and evening commuters."

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Golborne Deli images.

Aleksandar Loncar of Golborne Deli & Bistro adds a note of caution. "Location is very important, but if you are not on a high street you have to work much harder to attract locals and regulars. Also deli items are not average products and cost more to obtain, especially if you are trying to source locally. You must be in an area where consumers appreciate quality, good food and have the ability to pay."

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Rosie & Mark Kacary of Norfolk Deli.

Whatever the season, delis located in tourist resorts or out-of-town rural areas may need to become 'go-to' destinations to attract new visitors and retain existing ones. Mark Kacary from the award-winning Norfolk Deli explains further. "Our footfall differs during the course of a year, so we have to make most of our money during summer and the week before Christmas. When someone visits a deli, they are looking for something special, things they typically can’t find elsewhere which are often made nearby, using local ingredients. People visit us because they do not want mass-produced goods and our lines include food we make ourselves. If something is genuinely homemade with fresh ingredients and not filled with factory-made preservatives, it will sell!"

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Theo Kyriakou of The Greek Larder.

Theodore Kyriakou from The Greek Larder agrees. "For delis to remain successful in the future, a delicatessen should be unique and individual, providing excellent quality items not available in the supermarkets. A good delicatessen makes things fresh from scratch, even curing and roasting its own meat."

Top ten tips

  • Choose your location carefully and check out the competition
  • Know your customers – who they are, what they like, how they change
  • Choose a name and look that tell the public what you do
  • Be relevant, seasonal and proactive
  • Have knowledgeable, charismatic staff
  • Keep tight stock control
  • Have a reserve of cash for 'dead months'
  • Provide homemade food in addition to other offerings
  • Consider other revenue streams
  • Maintain online presence

Although quality is a major selling point, the importance of good, knowledgeable service cannot be overstated. Kelly and Cooper invest time and energy in training their workforce, equipping them with extra information so that they can sell with confidence. "Customers love hearing stories about producers and products, which builds trust between retailer and consumer and helps to overcome the occasional hurdle of a higher price point." In addition, personality is a huge factor and forms one of their key brand values. "Our strategy focuses on employing staff with personality who may have less experience in the industry, but share our values and understand the significance of good service." Caroline Muir of Spanish food specialists Brindisa offers a further perspective. "You need trust in provenance and the stories being marketed. If food looks and sounds great, then the quality should reflect that. We have built a relationship with our suppliers spanning three decades, so can pass on our trust in them to the consumer. Additionally, we place particular value on quality control, so that food remains in optimum condition. This means employing not just passionate staff who understand our customers, but also specialists who know how to store our cheeses and carve our charcuterie in the right way".

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Bruce Langlands - Director of Food and Restaurants at Harrods.

First-rate produce and knowledgeable employees are vital too for the success of deli counters within food halls, as Bruce Langlands, Director of Food & Restaurants at Harrods highlights. "At Harrods, our goal is to showcase the best selections from around the world. In order to achieve this, provenance, innovation and quality are essential. We source diligently and continually in order to bring in the finest produce and newest discoveries. Having a team of shop counter colleagues with enviable and vast knowledge ensures customers are offered the best advice that both educates and assists in their choices."

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Jon Edwards, MD of The Ludlow Food Centre.

For businesses championing local provenance, the ‘made on site’ message can carry great weight, as The Ludlow Food Centre's Kay Thomas outlines. "It can be difficult communicating that much of what we sell in the deli is actually freshly made just metres from where someone is standing. We emphasis the link in every way we can – a window into our kitchen and many points of sale. Also, while many visitors frequently purchase our artisan cheeses, breads and preserves, not everyone buys food-to-go from the delicatessen, so we encourage links between the departments to drive footfall to the deli."

Delicatessen

The De Beauvoir Delicatessen.

Décor is another element to consider, which Harry Davies of The De Beauvoir Deli Co. explains: "The environment is the first thing you experience and sets the tone for everything else, but it’s important to strike a balance between design and functionality. What’s more, too much design starts to seem contrived, so I think it’s best to let your look evolve." For Kacary, the overall appearance is likewise crucial: "People like to visit premises that have a sense of style and which gives them something different, surprising and exciting. Apart from our stock and great knowledgeable staff, the only other way of achieving this is to ensure that the fixtures and fittings are top notch." Similarly, John Shepherd of Partridges advises the following: "The shop environment as a whole has to uphold the values of the deli counter and create a certain ambience. It is often the things you think you never notice like lighting, temperature and flooring materials that make the biggest impression."

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Billingtons of Lenzie Delicatessen.

Located next to a Glasgow train station, Billingtons of Lenzie, winner of the prestigious Regional Scotland Award at The Farm Shop & Deli Show 2016, has seen earnings increase annually by 12% since launching in 2012. Owners Mark and Sue Billington share their thoughts on some of the main things to get right. "Stock rotation has a huge effect on margins, so it's essential to keep stock moving and avoid those best-before dates. Cash flow is similarly critical, especially to help you trade through the quieter months." Reiterating the importance of location and thoroughly researching the area beforehand, they offer a note of caution for anyone considering opening a new delicatessen. "Set-up costs can be very high as suppliers may not be keen on giving too much credit initially. Also be prepared to work long unsociable hours and recognise the huge learning curve. Listen to your customers, stay proactive and be innovative." Kacary echoes these sentiments: "Keep things looking fresh, stay current and understand what's happening in the market, but be different and brand your business accordingly." However, during times of reduced cash flow, significant stock outlay may be required in advance for key times of the year, something which Kacary stresses. "You have to plan ahead. Think about Christmas stock in June and then budget to pay for it later in a quieter month like November when you might be cash poor. It is important to recognise and understand the spending patterns which will be unique to each deli. To assume that what you will sell in one month will be the same every month is probably one of the major reasons for a deli to fail."

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Chris & Christine Garnett of Hunters of Helmsley Delicatessen.

For many delicatessens, profit margins on premium products can be woefully low, so an on-site café or restaurant is indispensable, accounting for the majority of revenue, as well as helping to reduce food wastage. Nonetheless, while not every deli will have such facilities, the ability to provide ready meals can still add huge value. Hunters of Helmsley, located on the edge of the North Yorkshire Moors, is a family deli in a market town voted Britain's best in the 2015 Great British High Street Awards. At least 70% of its range comes from Yorkshire and supporting local suppliers is a central part of owners Chris & Christine Garnett's philosophy. "We are retail only and do not have space for a café", the Garnetts explain. "We sell around 50,000 made-to-order sandwiches every year, which is essential to our business, using the freshest ingredients with most of the meat sourced from local butchers and cooked on the premises. We use high quality local bread rolls, provide gluten-free options and do half sizes for children and smaller appetites. Our sandwiches are deep-filled, people travel long distances for them and although not the cheapest in the town, they definitely offer value for money."

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Michelle Steele of Earsham Street Deli.

The growing trend for artisan tea or coffee represents a further lucrative revenue stream and for Earsham Street Deli owner Michelle Steele, this is a key part of her strategy. "It's really important, because it brings people in who then might notice other items we sell. Offering a decent coffee sets a precedent for the rest of what we do and we have many customers who come in for their daily fix and only have to ask for 'the usual' as we get to know our regulars' preferences." Hampers are another popular way of boosting sales, for spring and summer picnickers, holiday home welcome treats and luxury gifts. At Hunters of Helmsley, Christmas hampers fit in with the Garnetts' personalised service ethos. "We receive orders year after year with bespoke hampers our most popular options. For example, people will say 'I want to spend £50 on a couple who love Italian food' and we will put something together accordingly. However, in the last few years, corporate hampers have declined as companies have cut back on their spending."

Delicatessen

Dalling & Co. Deli and Wine Merchant. Image by Robin Goldsmith.

Other methods of bringing in punters and increasing revenue include holding events, promotions and tastings. Jeff Folkins of Dalling & Co., a deli and wine merchant in Kings Langley, sees these extra services as critical for survival. "We hold monthly themed wine tastings with food for £15-£30 a head, have a monthly supper club, twice-weekly tapas nights, host private parties and charity promotions. You have to provide something of interest, otherwise you're just another shop on the High Street. For us, there is a clear symbiosis between the deli and wine shop, as visitors can eat in and have a bottle of wine, which attracts customers and earns us extra revenue through a small corkage charge." For Bruce Langlands, education through tastings can reap rewards too. "The Harrods shopper is more selective than ever, which I believe comes from a growing interest in understanding where the food has come from plus the vibrant and flourishing food scene London has to offer. Educating and inspiring our patrons with regards to provenance, heritage and craftsmanship is imperative, and there is no better way of doing this than tasting and experiencing the food first-hand. This is why we host a number of tastings for our newest and finest products throughout the year as well as masterclasses."

Top five pitfalls

  • Reduced cash flow at certain times of the year
  • Significant stock outlay required in advance for Christmas
  • Competition from supermarkets advertising deli counters
  • Long hours of working with few staff
  • Customer expectations can be difficult to manage

John Shepherd shares his thoughts on how to reach out to different age groups. "Small companies offer unique products and, through the medium of social media, help us sell them, particularly to our younger clientele, who are keener to support these smaller brands and start-ups. Older consumers tend to be more traditional in their purchasing and need to have the high quality deli staples such as hams, pies, smoked salmon, regional cheeses etc.." For Louisa Chapman-Andrews of Melrose and Morgan, an artisan grocery shop and kitchen in London, building a good relationship with local media, as well as maintaining a strong online presence are indispensable for attracting customers. "Local newspapers and glossy magazines care about what you are doing and will be glad to take news about new stock or services, run imagery and support what you do. But it's equally important to think about the on-the-ground bloggers and tweeters and target them with specific products or happenings in your shop that you know might pique their interest." Mark Billington echoes these sentiments. "We are very big on social media. It’s a great tool to build up clientele and keep them informed of upcoming events, promotions and new lines. We also have an online shop which is a useful secondary income, but needs to be constantly updated to be successful."

Delicatessen

Christmas at Partridges.

There are many challenges facing any business entering this sector, but establishing that there is a market within the local area is always the first step. For Kelly and Cooper, Pistachio & Pickle is very much at the heart of their Islington community. "It's a social hub where individuals meet and become friends, trade stories and services, get fed and watered and support local and home-grown producers". Ultimately, there will be a steep learning curve, driven by customer demand, product knowledge and a long-term strategy with a clear USP. John Shepherd offers some final advice: "Good delis need to be constantly nurtured, managed, organised, cleaned and lovingly tended. However, do not attempt the project as a hobby or to get out of the rat race. Do it for your love of good food and drink and of sharing it with like-minded people."

This is the full version of my article which was published in the June 2016 edition of Speciality Food Magazine.

All images provided by the businesses listed in this article, unless otherwise stated.

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