As I write this newsletter I have the UK daily newspaper in front of me that is announcing that Tesco are about to start the biggest price war in 25 years. This is a reaction to what is happening to the global economy and the fact that consumers are not becoming customers.

Tesco with a 3.4 Billion pound profit last year that was up 10.1% over the year before can afford to start a price war. The result is that in the medium to long term they will gain market share as the other retailers cannot keep reducing their prices to match the competition.

Where does this leave the farmers market?

Over all, farmers markets have weathered the storm well over the last few months, better than most retailers. That does not mean to say that will continue to be the case. Trying to match the supermarkets on price will not be a solution. Plus, in difficult times quality becomes more difficult to sell when consumers have been taught to be price aware
I recently gave a presentation with Jeff Stiely, an American conference presenter in Perth, Western Australia and he really presented the secret weapon for farmers markets in the future.

FLOUR VERSUS PANCAKES

He mentioned that small retailers were getting squeezed by online retailers, discounters, box stores and supermarkets. To sell the same old stuff as these retailers was not the answer.
He mentioned that in his local supermarket flour is sold and the difference between the cheapest and most expensive was 20%. But when he went to buy pancake mix which is also flour based the price was 900% above that if standard flour. You can see where the profit is and it is not in the flour.

This started me thinking and looking at farmers markets in a new way. How can a stall holder create pancake mix or something that is unique, better and more convenient.
In the last few weeks I have visited farmers markets in the UK, Italy, Hungary, Poland and Czech and it is interesting to see that the most successful retailers understand this theory and are taking existing products and creating new packages to increase the perceived value to the consumer.

Now is the time to brainstorm what is being presented to the consumer. The successful farmers market will have a mix between flour and pancake mix.
Making pancake mix is easier than selling flour. You must promote yourself, understand your consumer and build margin into the sales.