Mobile grocery shop... good idea?

Obukit

Hi,

Since the type of business I'm in is in long-term decline, I've been looking at other businesses. One that has always quite appealed to me is a mobile grocery store. The idea is simple - kit out the back of an old ambulance or box van with shelves, lighting etc. and go village to village selling groceries and also acting as a mobile "Post Office" for villages where there is no longer a permanent village shop. I would also delivery groceries to elderly or disabled people who need a small order and are unable/unwilling to use online shopping, and would prefer to telephone order.

This is the sort of thing I want (but with less day-glo stars!)
http://www.thevillagegrocer.co.uk/home

Around me the villages are pretty affluent so I wouldn't be trying to compete with Tescos on price - although hopefully a bit cheaper than a standard corner shop as my overheads would be lower. I'd want to sell locally grown fruit and veg, homemade bread, cakes and preserves, etc. that Tescos can't do, along with the convenience of being able to just pick up a pint of milk or whatever.

I've checked with the local council and I'd get a free street trading licence from them, which is nice and simple. I've also spoken to a few villages and also parish councils who are very keen on the idea, many say they have tried to start volunteer community shops but they haven't been able to find volunteers. They want a village shop and post office as they are useful services, but not always viable "full time" in small villages any more.

So... just to back up my market research... if you got a flyer through your door tomorrow, saying that there would be a mobile grocery shop/Post Office coming twice a week to your village for half an hour, delivering telephone orders if you are out (paying by card), what would your reaction be? Would it be the sort of thing you'd find useful?

Thanks in advance for your feedback! I like the idea of having a business that makes money AND also provides a "social service" to stop vulnerable people becoming isolated... but I want to check my enthusiasm isn't running away with me

Cheers,

Chris

Visiondvd

Hi hope this helps but here is some input.

I had a mobile shop a few years back, had it for approx 5 years.
The pros are, less overheads, delivered to doorstep, totally mobile, meaning you bring the business to them, it can be rewarding.

The cons are, winter weather means your idle, you probably will at some stage break down, try getting a mechanic in the winter for roadside. Heavy snow will make you redundant and customers waiting on that pint of milk will not blame the weatherman for no cornflakes, not a lot of room to carry complete range of anything, initial outlay for inverters large enough to cope with fridges etc, can be expensive, if you employ drivers, they will drive it like a company van (ruthless), because the council will not charge for street trading, every other tom !!!!!! and harry in the area will see you had a idea and copy it.
I now have several stationary shops, more overheads, more staff, less profit, would I go back to a mobile? only if I was to work it myself and no staff.
Dont mean to sound too harsh, but this is based on my experience's.
Maybe your's will be totally different.
Good Luck

Obukit

Visiondvd wrote: »

Hi hope this helps but here is some input.

I had a mobile shop a few years back, had it for approx 5 years.
The pros are, less overheads, delivered to doorstep, totally mobile, meaning you bring the business to them, it can be rewarding.

The cons are, winter weather means your idle, you probably will at some stage break down, try getting a mechanic in the winter for roadside. Heavy snow will make you redundant and customers waiting on that pint of milk will not blame the weatherman for no cornflakes, not a lot of room to carry complete range of anything, initial outlay for inverters large enough to cope with fridges etc, can be expensive, if you employ drivers, they will drive it like a company van (ruthless), because the council will not charge for street trading, every other tom !!!!!! and harry in the area will see you had a idea and copy it.
I now have several stationary shops, more overheads, more staff, less profit, would I go back to a mobile? only if I was to work it myself and no staff.
Dont mean to sound too harsh, but this is based on my experience's.
Maybe your's will be totally different.
Good Luck

Thank you, really useful advice. Yes, I would really want to keep it as a one-man thing at first, at least until I got the experience.

Luckily I live in Oxfordshire so because everything is flat even in the worst weather it was still possible for me to get around in my van last year. Will definitely bear it in mind, though - don't want customers complaining about missed deliveries! Although I think if you had chains and could get out in the snow, you'd probably make a killing as no-one wants to drive to Tescos then!

paddyrg

I guess you will need to be at the same places at the same times each week, or any trade you would have had for convenience will not know if you're coming or not. Mobile libraries, for instance, are really precise when they will be where, and for how long.

But add DVD hire to your list :-)

paulwf

You need to do a lot of research on profit margins. Firstly you will pay at wholesale more than Tesco charge at retail. So even with 0% markup you are more expensive. To illustrate the point I'm part of a buying group with a wholesaler but get a majority of goods from the supermarkets.

Next you need to work out what you will be making in cold hard cash based on your margins. Selling a pint of milk may net you 10p...if customers are only going to use you as a top up between "big shops" you are going to need literally hundreds of regular customers. Most likely you'll need a few higher priced items to get enough money in.

I'm not making any judgement on whether or not it will work, I'm just concerned you might get a shock the first time you walk into a wholesalers and see how expensive they are...and you don't even get clubcard points

Obukit

paulwf wrote: »

You need to do a lot of research on profit margins. Firstly you will pay at wholesale more than Tesco charge at retail. So even with 0% markup you are more expensive. To illustrate the point I'm part of a buying group with a wholesaler but get a majority of goods from the supermarkets.

Next you need to work out what you will be making in cold hard cash based on your margins. Selling a pint of milk may net you 10p...if customers are only going to use you as a top up between "big shops" you are going to need literally hundreds of regular customers. Most likely you'll need a few higher priced items to get enough money in.

I'm not making any judgement on whether or not it will work, I'm just concerned you might get a shock the first time you walk into a wholesalers and see how expensive they are...and you don't even get clubcard points

Thanks for the advice. I already have a Booker card so know how low the POR is on most items - it never ceases to amaze me how people can run a bricks and mortar shop on 15% - 30% POR... nothing really! Thankfully I know people who work at supermarkets, and who are able to get cases of stuff if I need it and it is much cheaper (I speak as an avid MSEr!), although clearly I would want to get most of the stuff at a wholesaler from a time point of view.

I know I will make a relatively small amount of profit on the actual groceries and Post Office side of it, my plan is to have those as the "service" side of the business. My hope is that if they're in to buy a pint of milk, they'll also buy some local fruit and veg, bread, cakes etc. where I can make a much higher POR. Obviously the issue there is wastage, but I hope to get most of it on sale or return. I guess as I do it for longer, I'll get a pretty good idea of what I'll need each day.

ricky9

Have you really looked at your overheads?
Fuel over £6 a gallon,running cost of van insurance,servicing ect could add another £0.10 a mile to your costs

s_b

we have a fish man comes round on a thursday at 2.30 prompt
weve only managed to use him once because work gets in the way
therefore consider your customer base, what they will spend,and do the costings
as mentioned fuel will be a real killer too
have you seen the french film the grocers son?
quite good
http://www.amazon.co.uk/Grocers-Son-DVD-Nicolas-Cazale/dp/B00288A1LA
you might get some tips:)

Obukit

ricky9 wrote: »

Have you really looked at your overheads?
Fuel over £6 a gallon,running cost of van insurance,servicing ect could add another £0.10 a mile to your costs

Part of my aim is to keep my overheads as low as possible. I intend to run the van on free used vegetable oil, as I do my other vans. Insurance works out at about £2 per day, servicing I will do myself. There are costs but nothing compared to even just the rent of a bricks and mortar store.

s_b wrote: »

we have a fish man comes round on a thursday at 2.30 prompt
weve only managed to use him once because work gets in the way
therefore consider your customer base, what they will spend,and do the costings
as mentioned fuel will be a real killer too
have you seen the french film the grocers son?
quite good
http://www.amazon.co.uk/Grocers-Son-DVD-Nicolas-Cazale/dp/B00288A1LA
you might get some tips:)

As mentioned, most of the villages around me are affluent and therefore have a high proportion of retired people and stay a home mums. I think the retired people are my key market, as these will have high disposable income and are more reluctant to drive. I also intent to run Saturday and Sunday, having a day off midweek, to capitalise on when most people will be at home.

Haven't seen the film but thanks for the tip, reserved .

ricky9

insurance will cost alot more public liability insurance for one.
Free veg oil good one but you are only aloud to use 2500 liters a year duty free

ricky9

remember you need to sell alot of items to make money
eg if you buy a item at a £1 and sell it with a 30% mark up you need to sell 167 items to earn £50 minus your overheads for van and wages