Looking for efficiencies in your business and for avenues to increase revenue should always come before any decision to cut quality, says David Henley of Henley’s Fish & Chips in Wivenhoe, Essex
It’s extremely challenging at the moment with not just utility bills, but all our raw materials ever increasing, and I find that people can very easily take the wrong route: they make changes that decrease the quality of their product for the sake of making some cost savings. And it’s just so short-sighted, it really is, because you can build your reputation over many years but you can lose it in a few days by serving an inferior product.
By all means try new things but, before you make any cuts, analyse your turnover at specific times because it could be that you could make savings in other areas instead. You could have a fully staffed and managed shop on a Monday literally burning gas and electricity and when you break everything down and analyse your net profit, it might be more beneficial to actually close that day. When we’ve done this, I’d say about 90% of that trade comes back on the other days.
Shops also need to start thinking about how they can create new revenue streams. One answer is taking your product to people’s doors. We’ve recently partnered with Just Eat, Deliveroo and Uber Eats and we use their drivers. I was a little bit apprehensive at first, but it’s the best thing we’ve ever done. About 35-40% of our turnover now comes from delivery and, yes, they take a percentage because we’re paying to have a delivery service there when we need it, but what we do is increase our online menu prices to offset it.
Simply shrugging off the idea of doing deliveries with an online platform and saying, ‘well I’m not going to give them 30%’ is very short-sighted because I’m afraid that’s the way it’s going. I don’t know any person under the age of 21 that goes and queues up at their fish and chip shop or their local takeaway. They all use an app.
Since introducing delivery we are selling a lot more sides. Our staff are trained in the shop to upsell and about 10% of customers take it up, but online it’s more like 30-40%.
We had a customer recently who ordered a large portion of chips and it came to £8.50 with all the fees. She may have been cooking ham and eggs and wanted proper chip shop chips. If she didn’t have that convenience of just going on the app and ordering then we wouldn’t have got that sale. And she was happy to pay what she did as she left us a five star review!
I would just like to warn shops about unscrupulous utility brokers. I’ve heard from a lot of shops recently who have had cold callers phone them with very competitive rates on gas and electricity that haven’t turned out to be what they said they were and they are now locked into a two, three or four-year contract. So be very careful and make sure you check the company you go with.
And finally, cultivate great relationships with your suppliers because loyalty works both ways. We’ve worked with our fish supplier for many years and during this tough time they have agreed to sell us 90 cases of fish at an agreed price, so we know for the next few months we’re going to be getting our margins. And I know it sounds ridiculous, but pay your suppliers on time because if you run out of something on a Friday evening and you need somebody to drop something off, the likelihood is they will. But they won’t if they’re chasing you all the time because you’re not settling your account on time.