Heckstall & Smith
Proper butchers’ shop that seizes on changing consumer behaviour and a gap in the market.
- Location London, United Kingdom
Product(s) and/or service(s)
Heckstall & Smith would be a butchers’ shop and community hub for the South East London suburb of Ladywell.
The shop, which would be led by an experienced business person and marketer, and a butcher, intends to use traditional butchery methods to get the maximum flavour and value from meats. First class butchery would be combined with friendly advice and community involvement to keep customers coming back and increase their spending in the long term.
By implementing the plan as detailed, within three years Heckstall & Smith would hopefully be a profitable business, with long-term prospects of remaining so without the day-to-day involvement of the founding director.
Risk will be mitigated by having Paul Grout, owner of many successful butchers’ shops, as a non-executive director, working closely with an accountancy firm, resilience testing finances, and using specialists to incorporate the business, issue shareholder agreements and develop insurance cover.
Heckstall & Smith butchers’ shop would make Ladywell a more enjoyable place to live. We would do this by selling great meat, contributing to our community and helping customers become more confident cooks.
We would sell great meat by only offering meat we are proud of.
We would contribute to our community by taking a genuine interest in our customers’ lives, supporting local businesses and getting involved in community events.
We would help our customers become more confident cooks by always offering practical and unbiased advice, but never being pretentious or condescending.
Substantial accomplishments to date
Already developed is a comprehensive business plan, covering everything from cash flow to uniforms. Additionally we have:
• Joining the core team as a non-executive director the owner of successful London butchers’ shops Meat London Ltd.
• Joining the wider team we have builders, crafts people, farmers, designers, artists and website developers committing to volunteer their services or bill flexibly
• A potential site for the shop
We would be advisors on meat and cookery to our customers.
The consultancy we give on what meat to buy would not be based on what will make us the money in the short term, but would be led by the customer’s best interests, resulting in a long-term relationship and greater income overall.
Short term, individual transactions may not be as profitable. However, in the long term you have built a trusting relationship with a customer, meaning more money overall.
Overall, we want to make 50% gross profit from each carcass.
That doesn’t mean that we need to price every cut for the same gross profit. As shown by our market research, customers have quite a spread of pricing expectations. Therefore, we should cater for that in the pricing strategy.
For example, customer expectation of the price for steak per person ranges from £2 – £4 to more than £10. So, let’s offer great steak at each of these price points. Rump can be around £16 per kilo and fillet around £40 per kilo, with ribeye, sirloin and T-bone sitting at a price point within the range.
Overall, we would aim to make 50% gross profit, but won’t price ourselves out of customers’ expectations.
Discounting is not something we would pursue as a strategy.
Firstly, it does terrible damage to your carefully protected bottom line.
Secondly, it cheapens your product and reduces trust in your prices. If you price something at an amount customers must know you are doing it for a reason. If you start discounting, customers will begin, rightly, believing that you are overcharging.
Discounting can help with stock rotation, but instead we will use recipes and marketing to rotate stock.
Use of proceeds
These proceeds would be used to open the doors of Heckstall & Smith – £100,000 would be committed to fitting the shop, purchasing equipment, training staff and marketing, and £30,000 would be put aside with the already secured £30,000 for cash flow purposes.
Setup costs have been estimated based on having to completely refit the shop from the brick and joists up, and included a 50% contingency on shop fitting and 25% on everything else.
Cash flow has been professionally calculated by an accountant using Sage. The amount of cash flow funding required was decided on revenue falling 25% below estimates, to ensure cash flow doesn’t stop Heckstall & Smith moving to profitability.
In September 2014 we developed a market research survey that received over 245 responses. Given the group was self-selecting and most people would only complete a survey about a butchers’ shop that they intend to use, we are assuming this survey is of likely customers.
The first three questions asked about the respondent’s household in general. Respondents had an average of:
• 2.0 adults and 1.2 children living in their household
• 1.3 people from each household commuting to London for work
• £82,000 per annum household income
Section two of the survey asked respondents about their current meat eating and purchasing behaviour. Highlights included:
• Households cook an average of 6.5 meals from scratch per week. An average of 4.3 of which contain meat
• Households spend an average of £25 per week on meat and, therefore, £12.5 per week per adult
• Currently supermarkets are overwhelmingly respondents’ main source of meat, 67%, versus 11% who currently use a butchers’ shop
The last section of the survey asked respondents how they might act if a butchers’ shop was available on Ladywell’s high street. Highlights included:
• The main reason that respondents don’t currently use a butchers’ shop for the majority of their meat purchasing is that there is no local butchers’ shop, 61%. A further 17% don’t use one because of lack of time and the vast majority of those who selected ‘Other’ indicated that convenience was their main reason for not using a local butchers’ shop currently. Only 4% of respondents said their decision was down to cost
• 54% of respondents would buy all of their meat from a local butchers’ shop and of the remainder, 43%, said they’d buy their meat from it occasionally
Characteristics of target market
In 2013 in the UK, 9.6% of fresh beef, lamb and pork was purchased from butchers’ shops, which is equivalent to 47,000,000 kg or £370,000,000 annually.
The view of the owner of Meat London Ltd Paul Grout is that, “It’s probably true that the retail butchery industry is growing faster than any other food sector. In recent years, there has been a marked resurgence from the public in their interest in small, independent shops. The public have become a lot more aware of what they eat and are showing a real interest in knowing where their food comes from and how it is produced and prepared – independent high street retailers, especially butchers, are fulfilling the desire.”
We are confident that the vast majority of Londoners would want to use a butchers’ shop if one was available on their local high street. When asked “If you had a butchers’ shop, which sold cared for meat at fair prices, on your local high street, how often would you use it?”, 80% say they would buy over 50% of their fresh meat from it.
Social media will be an extension of the conversation that we would be having in the shop and an opportunity to bring customers further inside the business; e.g. you can’t show a customer the farms you buy from in store, but you can tweet and post pictures from your visits.
As in the shop, the staff would be our most powerful marketing tool on social media. Encouraging and empowering them to talk about what they’re doing in an authentic way would give the brand real personality; essential for successful social media.
The main rules with social media would be; do not make it complicated, do not polish it and encourage staff to trust their instincts.
The blog would tell the story of Heckstall & Smith, from creating the perfect butchers’ sausage to key milestones. It would be in 300 – 400 word conversational posts, with contributions from all staff.
A website is your internet shop front. This means it has two main functions, to echo the look and feel of the shop, fairly simple, and to have prime position on the internet high street, Google, which is not so easy.
We are investing in having the website built from scratch by an SEO expert to put us at the top of the Google rankings around common search terms related to Ladywell.
In the local area there are two main blogs, Brockley Central, which has around 30,000 unique monthly users, and My Ladywell. We are already in contact with both outlets and would continue to be so, with a view to securing coverage of the key milestones for Heckstall & Smith.
Sponsorship of local events would be used to demonstrate our commitment to being involved in the local community.
Going even further, once the initial opening period is over, we can run barbeque stalls at local community events, increasing awareness of the shop in a positive context and allowing customers to taste the end result at its best, as well as opening up a new revenue opportunity.
61% of likely customers say their main reason for not using a butchers’ shop currently is that there isn’t one locally, which shows that the nearest butchers’ shop, the Proud Sow, is not really a competitor.
The only other place we are aware of that local residents can access butcher quality meat is at Brockley Market, a farmers’ market held on Saturdays near St Johns, about a mile from Ladywell. The market has two butchers’ stalls, which offer pre-cut joints from butchers’ shops in other parts of London and Essex.
Ladywell has no supermarket; the nearest traditional supermarkets are around two miles away: Tesco in Catford and Lewisham, and Sainsbury’s in New Cross and Lewisham. These supermarkets are currently the main source of meat for local residents, 62%, but this is based around convenience rather than choice; 54% of the same group say they would buy almost all their meat from a local butchers’ shop and only 4% said that price is the reason that they don’t buy from a butchers’ shop currently.
There is no high-end supermarket, e.g. a Waitrose or Wholefoods, in the borough of Lewisham.
Even if these existed, we would still hold our market share because we would offer services that are important to consumers but cannot be provided by anyone but a proper butchers’ shop.
- Non-executive director