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  1. Davi Mai

    Davi Mai Banned Supporter

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    You own a small food shop...

    Discussion in 'The Lounge' started by Davi Mai, Aug 26, 2020.

    On the edge of a city. The area is a mix of light industrial/commercial with a few apartment blocks. There's quite a lot of construction going on in the area. You sell coffees, cold drinks, sandwiches, some basic hot food like pies and pastries. A good proportion of your customers are the construction crews, general labourers and some office staff.

    Most of your revenue comes in during mid morning and lunch. Towards the middle of the afternoon, you've been discounting the fresh and hot food because you won't be able to sell it tomorrow, anyway.

    You've now created a problem. You notice that a lot of the blue collar workers come into the shop later in the afternoon, looking for the discounted food, to save some of their hand earned money. Your sales are still steady, but your profit margins are slipping. You also have to keep your only sales assistant on later in the day to deal with the new foot traffic pattern.

    What do you do? Stop the afternoon discounting to teach the market that there's no use waiting until later in the day, they'll pay the same? What if they find somewhere cheaper than you to get their lunch? Do you try to sell at those lower prices all day, but sell more so you benefit from some economy of scale? Do you re-position your offering to be higher-end, higher priced, knowing you'll lose the construction workers but might gain more business from the office staff?

    Or some other idea?

    (Jeeze, I may have just written my most boring post ever... sorry!)
     
    Last edited: Aug 26, 2020
  2. Naomasa298

    Naomasa298 HP: 12/210 MP: 0/130 Contributor

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    Ooh! Ooh! Is this like Choose Your Own Adventure?

    OK, I wait until nightfall and don the costume of my alter-ego, Smackdown, and take the Smackmobile out on patrol. I go down the docks and look for drugs deal in progress. I aim to bust the deal, and use the money to support my food shop.

    Not what you were looking for?
     
    Davi Mai likes this.
  3. Davi Mai

    Davi Mai Banned Supporter

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    love it! You just made a fairly boring scenario much more interesting :)
     
  4. Wreybies

    Wreybies Thrice Retired Supporter Contributor

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    You haven't found the sweet spot yet. Lower the price of the perishables a bit and adjust your output. If the market is waiting for the discount, then you either haven't priced the items correctly to start or you're just making too much product, or a combination of both. Lowering the price will make the items feel more attractive, more of a deal to the the timely buyers and will deplete your stock before the discount crowd even happens.
     
    Last edited: Aug 26, 2020
  5. Homer Potvin

    Homer Potvin Funky like your grandpa's drawers.... Staff Contributor

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    This wouldn't happen. Take it from a guy who sells $2 million in a food a year (or did before the lockdown).

    1. There is very little that can't be sold the following day. In fact, I can't think of anything we throw out besides leftover mashed potatoes and bearnaise sauce... neither of which costs much to produce. Your "coffees, cold drinks, sandwiches, some basic hot food like pies and pastries," are all stable products and good for days. Well coffee isn't, but brewing predictable batches are a piece of cake.

    2. You adjust your pars accordingly. You prep only what you need. Any food business that can't do this will be out of business very quickly. And this isn't very difficult.

    3. You never, ever, ever discount food like this. You will alienate your customer base even faster than you'll go out of business.

    4. Any business that advertises that everything is "fresh baked" daily, is lying, lying, lying. The do make a "fresh" batch everyday, but yesterday's product will be rolled out ahead of time.

    This is possible but probably wouldn't work in the neighborhood you've described. You're essentially describing a cafe, and those are all based on location and convenience. They're rarely a destination like a restaurant.
     
    EFMingo and Davi Mai like this.
  6. EFMingo

    EFMingo A Modern Dinosaur Staff Supporter Contributor

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    I'm a little off track with my observation, but I wanted to comment on your assumptions of blue-collar workers. You say they come later in the day looking for deals, but what sort of time frame do you mean by later in the afternoon? Most construction jobs are strict on scheduling, and would likely not have enough time outside of their 11 or noon lunch to make a short trip over to a cafe-esque environment. Also, they tend to bring their own food to work because of this time limitation, preferring to buy cheaper and smaller additions to their lunch or pre-work routine in the early hours of the morning. This is why corner convenience stores are filled from 4am to 7am with a lot of blue collar people getting their discount coffee, ice, and other random snacks before the day occurs. This is not saying blue-collar workers, like road workers, make less money, since they certainly make more than people usually expect, but they do tend to be frugal.

    With that in mind, lunch and late afternoon hours will likely be packed with office workers on breaks, off-early, or in meetings. They would likely make up almost all of your afternoon sales, depending on the location. In an inner city environment, they'll be a large part of the morning crowd as well and subject to many of the same routines. There will also be other groups present as well, such as school crowds if there are high schools or colleges nearby, which have their own peak hours as well.

    What I'm saying is, your likely to be dealing with multiple groups of people, and discounting late in the day consumers would be a mistake as they are part of a different group and subject to buy at normal prices regardless of sales.
     
    Davi Mai likes this.
  7. Iain Aschendale

    Iain Aschendale Potatoes again? Supporter Contributor

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    Mod hat on gently I have to ask what the purpose of this thread is? If it's for a story, it would probably be best placed in Research. If you're asking for business advice though, that's outside of the remit of this forum.

    OP is no longer with us and I'm still not sure of the point, so I'm closing this little roach coach up.

    :closed:
     
    Last edited: Sep 3, 2020
    jannert likes this.
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