The importance of product selection

When Tesco introduced its first small format convenience stores some years back, it pinpointed the 100 key items it needed to always have in stock at each of these outlets. The list was an odd mix including the likes of Steradent denture tablets and Carlsberg Special Brew.

The criteria was based on them being premium-priced products that are bought with great frequency by customers who are extremely loyal to these items, to the extent that they would do their entire shop at a rival store if these particular products were not available.

This importance of product selection came to mind when my local independent baker Dunn’s in north London’s Crouch End area suddenly stopped baking its cinnamon buns on weekend mornings. My children are such fans that I’d stop off on my morning cycle ride and pick up a couple on my way back home. I’d invariably grab some other items too from the core range. But when they stopped baking these particular delicacies, I ended up visiting the store a lot less frequently.

Pleasingly a couple of months later the buns returned to the store and I’m now back to doing my regular cycle stop-offs at Dunn’s. My suspicions are that I was not the only person who diverted their business away from the shop when this popular breakfast product was removed. I reckon Dunn’s is much more acutely aware of its ranging decisions today because the market around it has changed so dramatically since covid-19. The 200-year-old family owned bakery has had to adapt to changing market conditions like many other established foodservice companies.

The pandemic has directly driven great change in Crouch End. This includes – rather interestingly – an influx of new bakery businesses. The underlying appeal of the area to the baking fraternity is, undoubtedly, the increase in people who now work locally but who would have previously been travelling into central London to offices. It’s a similar story at many other edge-of-city locations around the country. These people have all built up a serious taste for sourdough (and other baked goods) during lockdown and they are consuming more of these foodstuffs locally.

One of these individuals did so well baking, and selling, sourdough from her kitchen that she has taken on premises in Crouch End from where she bakes and hosts bakery courses. Although sourdough is at the heart of the business, the offer has been broadened to include viennoiserie and a coffee bar.

The area also has a Gail’s, which has done incredibly well (always queues outside) this past year along with the rest of the chain, to the extent that owner Luke Johnson and his Risk Capital Partners has felt sufficiently confident to place the business back on the market with a reported price tag of £250m.

Another newcomer to the area is the very fast expanding independent chain Wenzel’s that originated in north west London but is now selling its pretzels and Challah from outlets around the whole of the capital and increasingly beyond.

Just down the road from Crouch End and shortly to open is the latest unit from The Dusty Knuckle, which has achieved great success in east London with its baked goods and pizzas, and is now branching out. During lockdown, it cleverly used a former milk van to deliver its breads and pastries around London, which proved incredibly popular and no doubt provided great on-the-ground research into potential locations for new outlets. 

The influx of new businesses like these is being made possible by the closure of other operators that have struggled to deal with covid-19. Among them, in Crouch End, was ironically another bakery chain – the 66-year-old Percy Ingles whose 48 units closed last summer. The traditional London bakery was often compared to Greggs for focusing on old-school favourites such as doughnuts, sausage rolls and fresh cream cakes. However, Greggs, in contrast, has changed out of all recognition and adapted its offer and understood that Tottenham cake does not sell in Crouch End (and yes, there is also a branch of Greggs here) never mind in Liverpool.

Its demise, in stark contrast to the rise of many other bakers, illustrates the need to have a differentiated, up-with-events proposition and to specifically tailor the offer to the demands of customers within specific locations. And also ensure the cinnamon buns are always on the shelf in time for breakfast – certainly in Crouch End anyway.

Glynn Davis, editor of Retail Insider 

This piece was originally published on Propel Info where Glynn Davis writes a regular Friday opinion piece. Retail Insider would like to thank Propel for allowing the reproduction of this column.