Posted on: April 10, 2017Articles

I can’t say I watched a lot of the recent world cup tournament, but enjoyed watching highlights replays and images of the best players in the world duking it out and being cheered on by thousands of screaming fans.
The colour and spectacle of the whole event was world class and team jerseys, paraphernalia and merchandise sales went through the roof. Not only supporting your team, but adorning yourself in your team’s colours was an essential element for any devout fan of the game.
Uniforms and jerseys are an essential element of the game. Not only do they identify what team you play for but it can help you easily pick out your competition during the game. If only it were as easy to pick our competition out in the world of small business. These days it have become increasingly difficult for those of us in business to really pick out who exactly to watch out for so far as competitive sales are concerned.

I recall back when we had selected our second location in Brisbane Australia and we had started construction in a large shopping mall. (Before we read on – never out your ice cream store in a large shopping mall). I was puzzled by the fact that the owner of the Coffee and Muffin shop across the walkway wasn’t too happy about us coming in. Each day the owner would grumble around while looking at our shop taking form.

One Monday morning when we was particularly grumblesome I approached him, and not being steeped in retail knowledge at the point, I asked him was he was so concerned about. It appeared to me that as he sold coffee and muffins, and I would be selling ice cream, that we would not be stealing sales from each other.
He taught me a valuable retail lesson that Monday morning many years ago. He said that regardless of what we sell, as soon as someone walks through the doors to the food court with $10 in their hands, we were ALL competition. He could not have spoken truer words.
That was nearly 15 years ago and those words still ring true today. More so than ever. With a multitude of option s for family treats and entertainment it has become very hard for us to really narrow down on who our frozen dessert and general competitors are these days. This is occurring for a number of reasons.

 
1. More standard food concepts are offering more frozen desserts.
When McDonalds started selling ice cream cones, they changed the game for ice cream shop owners everywhere. Since then they have sold billions of them. At prices ranging from 30c to 99c and offering a variety of options so far as dipped cones and such, they have become the go to place for a cheap dessert. No one ever complains about the quality because it is accepted that when you buy a 60c cone it is not going to be as gourmet as the banana split you get at the creamery.
Other quick service restaurants have taken up when McDonalds left off and feature more gourmet ice cream and frozen dessert options to add to their existing menu.

Chains such as Freddy’s and Culvers in the USA have selected frozen custard as their dessert of choice and market the product heavily.
In fact in a recent store opening in California, one of these locations had total sales in the first week of $100,000 and 20% of those sales were ice cream related products. So in one week, a burger joint sold $20,000 worth of cones, sundaes and other dessert products. These kinds of numbers makes the local ice cream shop cringe, as these sales for the most part would have come from a larger percentage of his customers.
So now these concepts are spending as much advertising dollars and effort on dessert as they are won their main stay menu items.

 

2. More non-traditional outlets are selling frozen desserts
I have spent the last week or so at a trade show in Brisbane Australia. The sponsor of the trade show is a large grocery wholesaler that sells grocery, meats, cheese, fruit, vege and everything else imaginable to independent and small chain convenience, grocery and petrol station businesses. It was a virtual grocery store show for grocery store owners. We were invited to display self-serve frozen yogurt, and had a stand with a mock yogurt concept built out with customers being able to serve themselves. This was not in a dessert store, but a grocery store. And the concept was extremely popular at the show.
In fact I gave a presentation about all the non-traditional locations that I had worked with in the USA that have added frozen dessert concepts. Locations such as Gas Stations, pharmacy’s, convenience stores, and other locations have all turned towards adding a frozen treat option to their offering.
It seems that there are many destinations now to get an after dinner treat, which means that the goal posts are constantly changing when it comes to identifying who are competitors in our industry.

 
3. Frozen Desserts have become more nimble
As mentioned in previously articles, the food truck and mobile scene is become more robust each season. More and more ice cream concepts are hitting the road, and as a consequence those of us with standard brick and mortar locations can be sometimes left in the dust. Those standard concepts that have added a mobile or food truck option to their businesses are finding that on some days, the food truck is bringing in more revenue than the brick and mortar store.

 

4. We are competing again non-food entertainment
As my muffin friend so eloquently explained, we were all competing for the same $10 bill. Our competition has become much broader than simply ice cream or frozen treats. Family budgets are decreasing and the weekly or monthly night out could very well be a night at the movies, or the video game arcade or the putt putt course. If the muffin man’s prophecy is true, then each of these types of businesses are our competition. Even though they are as different from our business model like ice cream is to muffins, they still take away our potential customers.
So what to do?

 
These elements all point to the fact that it is harder and harder to identify who is working against us in the field. It is just like two teams running on the field with the same jersey. Who do you pass the ball to? Who is looking to be someone that could help us achieve our goals, but then may turn out to be on the other side?
So what can we actually do in the face of increasing opposition in the market place? Let me give you a taste of what I think we need to do;

 
 Make sure your ship is in order. You need to ensure that your food costs, labour costs and rent costs are in line with industry standards. Complaining about too much competition when you are paying too much for their employees is like complaining the ship is going to slow while the anchor is still lowered.

 Does your store need a refresh? Sometimes we spend so much time in our shops that we become numb to the ways that the place looks. Are there areas that need to be repaired, repainted and replaced?

 Do you employees go the extra mile in making people feel comfortable and welcomed in your shop? Remember they are the front line of your business and represent you, your ice cream and your reputation every single day.

 Have you reviewed and refreshed your menu lately? Every 12 months you should be doing a menu review to see what is selling well, what is not selling and adjusting the boards accordingly.

These are all standard core topics that we can’t afford to let slip, and at the same time – try and keep an eye on your competition because the posts are changing all the time.

 

 

Keep on scooping folks

Steve Christensen

Comments are closed.