This fishmonger managed to stay afloat despite inflation
- Amber Kuipers
- 25 January 2023
- Managing and growing
Fresh food vendors have to deal with rising costs, falling turnover, and competitive supermarkets. So what can they do to keep their head above water? In this article, fish specialist Hugo van der Meij from Oegstgeest gives 3 tips on how he managed to stay afloat with a few clever solutions.
1. Create a financial overview
Every week, Van der Meij draws up a new financial overview to calculate his margins. That way he always knows where he stands. “I know that I need to make a gross profit margin of at least 57% to cover all my costs”, Van der Meij explains. “After paying my suppliers, salaries, the Tax Administration, and my pension fund, I am left with a bit of income and some money to put aside.”
The master fishmonger relies on Excel for his relatively simple financial overviews. “My scales are linked to a computer program”, Van der Meij explains. “The program retrieves all sorts of data, such as turnover and the number of products sold. I keep track of my turnover in an Excel sheet every week. I then subtract all the costs. If my gross margin exceeds 57% when all is said and done, I am good. If it is lower than that, I need to act.”
A liquidity budget tells you whether there is enough money to pay your bills or whether you need extra money in certain months. For example, for extra stock purchases for the holidays.
2. Reduce costs, stabilise your profit margins
When Van der Meij saw that his energy costs were about to triple, he made changes to keep his profit margins stable. Van der Meij focused on four areas: his prices, his staff’s working hours, customer service, and product storage. To decide what to do, he used the following data categories:
- Total turnover
- Turnover per employee
- Turnover per product (category)
- Sales by product (category) by hour of day
- Average time spent per customer per employee
- Average number of customers per day per employee
Video: Data in a fish shop
Watch the video Data in a fish . In it, Hugo van der Meij tells his story. He saved on several cost items through smart use of his data. This is how he continues to make a profit. (English subtitles are available via settings.)
“Push your prices to the limit”, Van der Meij recommends. “I break down the prices of all my products and meals. I calculate the costs and set a price that lets me cover all costs involved, including staffing and packaging. If I end up at €3.95 but think I will also sell at a higher price, I will increase the price.”
Working hours staff
When turnover starts to drop, see if you can use your staff at other moments. For example, by working with plus and minus hours. Van der Meij explains: “If employees work 10 hours overtime during the Christmas period, I make sure they work 10 hours less when business slows down. As a result, my staffing costs are linked to my turnover. When my turnover is high, my staff costs are high. And when my turnover is low, my staffing costs follow suit. In the end, my profit margin remains stable.”
In addition to permanent employees, Van der Meij also employs on-call workers. “They are just as capable of pre-packaging my products and cost less. After all, they earn less than permanent employees and I only have to pay them when I need them. Van der Meij also keeps a close eye on sales figures. “If I notice that we are selling less an hour before closing time, I just let my employees go home earlier.”
Time per customer
Van der Meij analysed how much time his staff spent on one customer and came up with a solution to improve their speed. He switched to pre-packaged products and self-service. “Now my staff only needs to work the till and no longer weigh out. Instead of five minutes, a staff member now spends only 2 minutes per customer. My costs are now lower and customers do not have to wait as long.”
Energy efficient storage and cooking
By keeping his frozen inventory as small as possible, Van der Meij hopes to save 30% in energy costs. That is why he replaced his freezer that cost € 800 a month in energy for a smaller freezer with €200 energy costs. On top of that, he also rents freezer space from a supplier for €40 a month. “Because the rental costs are much lower than the cost of using my own freezer.” Finally, Van der Meij buys products only when he needs them. That way, he does not have to keep them in storage.
Finally, he also switched off one counter section and now uses his oven 3 hours a day less than before to save even more energy. “When you add it all up, this lets me cut my total oven time by 900 hours a year (3 hours a day x 6 days a week x 50 weeks a year).
3. Customer acquisition
According to Van der Meij, there are a number of reasons why people choose his shop over the supermarket. His expert knowledge of fish is one. “Our employees give customers advice and tips and share customer stories with other customers. Supermarkets are totally different: there, staff change faster and often work in multiple departments.”
Another reason is quality. “The main difference between us and the supermarket is that we sell high-quality fish that is actually fresh”, Van der Meij explains. “A local smoker smokes our salmon. The fish they smoke today can be sold tomorrow. With supermarket salmon, I often wonder whether it was smoked at all or if they just added a smoke aroma. (in Dutch) by the Keuringsdienst van Waarde, a Dutch TV show and consumer watchdog, revealed that 'fresh' fish from supermarkets has often been frozen and then thawed.”
Van der Meij is actively pursuing new ways to acquire customers. “We offer product samples to passersby. If 40 out of every 100 people come in to buy something as a result, our turnover gets a nice little boost. And hopefully, some of the 100 people may come back during the holidays for a special purchase.”
Figure out what you can offer your customers that supermarkets simply cannot. Perform a target group analysis to research your current or future customers.
Where to start? Get advice
No idea how to get started? The first step is figuring out what information you already have, like customer details and turnover figures. Next, reach out to your trade association or the KVK Advice Team. Your trade association can also put you in touch with your industry peers.
Here is a list of trade associations for fresh food vendors:
- Vakcentrum Nederland (in Dutch): the trade association for retail entrepreneurs
- VNV Visspecialisten (in Dutch): the trade association for fish shop and stall owners
- Koninklijke Nederlandse Slagers (KNS, in Dutch): the trade association for butchers
- Ambachtelijke Versdetailhandel Nederland (AVN, in Dutch): for fruit and vegetable specialists
Do you want to know where to find other data, how to unlock those data, and what software to use? Look no further than these digitisation experts:
- Digital Workshops (in Dutch): these educational institutions and companies will help you use your data, automate your processes, or get started with online sales and marketing.
- Trade association NLdigital (branchevereniging NLdigital, in Dutch) here you will find partners and knowledge to collaborate digitally.