Fighting the recession. Don't fight it ride it

[ButTheNut]

I can only speak for myself and the trade I am in(Convenienec Stores). Due to world events and the total mis-management of our economy by this Government I think we are on the brink, if not in, the worst recession this country has seen for many many years. Am I fearful for my businesses? Not really. I think if we are sensible, then this could actually be an oppotunity for small efficient businesses. I have yet to see a down turn in trade. In fact I had 17% growth in 1 shop and 8% in another last year. The supermarkets will ride it out, all be it with lower profits. They will slug it out by trying to tempt a dwindleing market with specials & discounts, to use there store. On the other hand people will always want convenience stores even more so during recession. People will start to think about how they spend thier money. People will and are starting to realize that going to the supermarket costs them a lot of money. Why spend £200 in a supermarket, £50 to £60 of which goes in the bin, when you could shop local and though the products sometimes cost more they throw very little away.
However this is certainly not a time to be complacent. I'm sure we all have competition and I believe the stores that will survive will be those that give the ever more fussy customers the best service. We don't have to be ultra cheap, but we do have to be perceived as giving value for money. I think if you get caught in the trap that only profit margin is king them you have a problem. It's far better to sell £100000 of goods at 20% margin than £20000 at 40% margin. Profit is king, not profitt margin.  There is a balance to be had. I try to keep all my KVIs(known vakue items) close to that of the supermarkets  but will up the margin on fast movers such as confectionaary. I also try to put as much price marked product in the shop as posible, but you have to watch you margins. I'm happy to take a hit on margin for a PMP if the manufacturer does as well. What I won't do is stock product when I'm taking all the hit.  Kelloggs Cornflakes PM is a prime example. 8%-9% margin on a product that size and value is taking the piss. That's the sort of margin reserved for spirits costing £10 plus.
If, like us you have been considering investing in your business, say a refit or new equipment then the next 18 months will probably be the best time to do it. There will certinly be some good deals out there with everyone scambling for business. Keep cost down and don't accept anything, negotiate. We have just managed to knock 5p of 2L of milk from our supplier which will say us about £3000 per year, plus got a final lease payment to transfere ownership down from £450 to£160. Don't forget we are customers to our suppliers and they are just as keen to keep thier customers as we are.
Please remember this is just my opinions and experiences. If they help anyone then that's great. Hope I'm not just telling people how to suck eggs.
Good luck
Paul