Starting a rural retail business

There is no better time to get into rural retailing. Rural retail has exploded accross the UK in recent years, aided by an increasingly food-savvy and environmentally aware public, and also farmers and land owners looking to diversify and reconnect with the consumer. ‘Local’ has become the loudest buzz word around food.

According to market research, there are some 4,000 farm shops in the UK, with a combined annual turnover estimated at £1.5 billion, with an average turnover of £270,000 (2002 figure) and ranging from £100,000 to £5 million plus.

Farm shops supply a selection of locally produced food and drink including meat, fish, game, poultry, cheese, eggs, preserves, chutney, wine, spirits and craft beers. Some also sell home-made ‘ready meals’, desserts, ice creams, cakes and artisan breads. Many well-established farm shops have on-site tearooms or cafés where they showcase and serve their produce, while others specialise in retailing meat and meat products and have an in-shop butchery.

Farm shops are typical diversification ventures run from premises as part of working farms that grow or rear some or all of the produce stocked by the shop, while other produce is sourced from local suppliers. Increasing numbers of farm shops are now trading online.

As well as a farm shop, you can consider allowing consumers to pick their own produce by operating as a pick-your-own (PYO) farm. Farm shops and PYO farms bring your customer to your door, saving you labour and transportation costs, and cut out the middleman.

A number of factors will determine the viability of a farm shop, including:

Location: How easy is it for potential customers to actually get to your property? How close is the nearest main road?

Access and parking facilities: Research has shown that ease of parking plays a big factor in the minds of customers.

Local competition: What other rural retails are in your area? You may be able to meet an untapped demand.

Suitable buildings: Due to the change in modern farming methods many farms and estates have buildings they simply no longer use. The potential to divesify these spaces is huge.

A steady supply of seasonal and marketable local produce: People have never been so interested in quality local food and how it is produced, in freshness and in traceability.

Check with your local planning authority to make sure a farm shop complies with regulations. Planning permission will likely be required for a new building or a change of use on an existing building to provide premises for a farm shop.

What else is important?

Research what others are doing: Rural retail is a thriving sector, learn what others have done that has been succesful.

Grant funding may be available: You may be eligible for funding up to 40% of the cost of your project.

Consider adding concessions: Consider that there are other businesses who will gladly pay to rent space from you to run thier business. This not only gives you another revenue stream, but more reasons for customers to visit you.