Riverford Farm Organic Farm shop expansion report
The growth for ethically friendly products in the UK has risen dramatically since the early 20th century, this is also the case for the organic food market. British shoppers have embarked upon their love with organic food, sending sales soaring. In 2008 organic food sales had grown by over 70% since 2002(. co. uk, 2008). Despite the recent blip due to the recent recession, organic food is finally finding its feet, with sales soaring once again. Riverford farm (located primarily in the south west of England) was established in the 1950s and was converted successfully into an organic food retailer in the mid 80s(southwestbusiness.co. uk, 2010).
The transformation was astonishing, Guy Watson started by delivering 30 vegetable boxes to his friends, today Riverford Farm delivers over 45,500 per year to customers all over the UK (southwestbusiness. co. uk, 2010). This dramatic rise in sales has led to great success for Riverford, helping them reach the sunday times fast track 100 in 2007. Sales were up 62% per annum, from i?? 5. 4m in 2004 to i?? 23. 1m in 2007, having over 87,000 customers across the UK (fasttrack. co. uk, 2007). Riverford target consumers are the pro organics, easy organics and
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Their most targeted consumer are the easy organics, these are more likely to be female, aged 35-44 primarily living in the south west. (Mintel, 2010). Executive summary Because of this recent success Riverford are looking to expand, the aim of this project is to compare two potential locations for Riverford to expand, also providing the layout for the store in which they are looking to expand. The report will present the potential for locating in Exeter situated in Devon (South West England) and Glastonbury as two new potential locations for riverford farms expansion.
The most efficient location will then be recommended to Riverford for future expansion plans. Relevant factors influencing our decision Labour Costs The costs of employing people with particular skills can vary between different areas (Slack et al, 2001). Glastonbury provides a more attractive area in terms of labour cost for Riverford, after doing some research it is clear that wages are lower than in Exeter.
A retail store manager in Exeter on average gets paid 19,262 per annum (Payscale.com, 2011a) whereas in Glastonbury the equivalent will be paid on average 16,985 (Payscale. com, 2011b), making it a more attractive proposition in terms of employment costs. Land costs Acquiring the site itself can play a major role in deciding where to locate, as land and rental costs can vary between Country and City. In this case we have seen a clear indication that land costs are cheaper in Glastonbury (country) compared with that of Exeter and the surrounding country (Near city centre).
I have found comparisons which suggest 13 acres of land in Glastonbury can be purchased for i?? 40,000(land-deals. co. uk,2011), whereas in Exeter for a similar price of 35,000 they would only be able to acquire 6 acres (uklanddirectory. org. uk, 2011). This boosts the attraction of potential investment in Glastonbury because for a farm shop land is extremely important for expansion is always a consideration and further land may be needed for future farming operations.