Bira has been talking to its members – including cookshops and housewares stockists – to compile a series of ‘top tips’ for retailing when inflation is increasing.
“With inflation higher than it was almost 30 years ago, many of today’s independent cookshops and housewares stockists will not have experienced running a business in such an inflationary period,” acknowledges Bira’s ceo Andrew Goodacre.
With inflation soaring due to due to cost price pressures rather than consumer demand, Andrew recognises that: “This type of inflation is even more challenging for businesses to manage.’
‘Stock management’ is the first in a series of tips for indies, as Andrew urges cookshops and housewares stockists to consider the following:
“The cost of stock sold is not just the original cost price, but more importantly the replacement cost, ie the cost of buying the stock back in. That means that if you can increase the sale price of existing stock before you sell it you have sufficient cash to replace it.
“Stock up on key products if you expect costs to rise. If you think a product range will continue to rise, it would be wise to buy more stock now whilst the prices are lower. Obviously, this is only possible if the business has the cash and able to tie up more money in stock. With that in mind, best practice would be to focus on the faster selling lines so that the stock is moving.
“Reduce stock range with the objective of removing or not re-ordering slower moving stock/ products. This will reduce the amount of money being held in stock, and release cash to help finance the higher cost of other stock.
“Secondary branding may be an option for some retailers – substituting ‘a branded’ products with own branded alternative which are often cheaper. This must be done carefully as these replacement branded products need to be of sufficient quality to not damage your reputation with shoppers.
“Review your supplier base’s terms to make sure you are obtaining the best possible price, or the best possible terms.”
Top: Inflation is soaring.