Butchers Crawshaw finally hit by the downturn

The Rotherham-based company described sales as “very disappointing” and said they reflected difficult trading conditions on the high street as rising meat prices coupled with reduced disposable income hit sales.

In a bid to turn around its fortunes, the group is to expand into side dishes and desserts after customers said this was what they wanted.

A small initial trial of ‘Crawshaw Kitchen Classics’ in two stores has proved successful and the range is to be rolled out to all 20 stores.

Crawshaw’s finance director Lynda Sherratt said the range will include oven ready dishes such as roast potatoes, dauphinoise potatoes and ham and cheese jacket potato skins.

It will also offer freshly prepared vegetable dishes such as carrot and parsnip and cauliflower gratin.

The desserts range will include cheesecake, caramel apple cake and lemon drizzle cake.

“We have been trialling the new range in two stores and will roll it out to all our stores. The feedback is very good,” said Ms Sherratt.

Crawshaw said overall sales for the first half to July 31 remained level at £9.4m.

But like-for-like sales over the period fell by four per cent.

They deteriorated further in August and September, falling by 10 per cent over the past eight weeks.

Crawshaw’s chairman Richard Rose said: “Underlying retail sales were very disappointing reflecting difficult trading conditions on the high street.”

Overall sales were buoyed by the mobile unit which visits various local markets and from the opening of a new store in Derby in February.

Pre-tax profits for the six months to July 31 fell from £230,000 to £68,000. Gross margins remained stable at £4.1m although retail margins fell slightly to 43.5 per cent from 44.1 per cent the previous year. Margins in the second quarter improved by one percentage point following a price increase in April.

Ms Sherratt said that chicken sales have held up better than lamb and prime beef products, which are considerably more expensive.

The trend for old-fashioned cuts, which has buoyed the group in the past, has faded and Ms Sherratt said lower value products such as mince, burgers and sausages are proving more popular.

Mr Rose said that after a promising start, the Derby store’s performance has been below expectations.

He said this was for the same reasons as sales overall have been disappointing.

In April, Crawshaw sold its market location in Doncaster to another trader.

“Markets are not a core element of our business and it made commercial sense to sell at this time,” said Mr Rose.

Despite the fall in recent like-for-like sales, Mr Rose said the retail margin has responded well to the new initiatives, rising by more than two percentage points over the past eight weeks.

“The retail climate is particularly challenging, and is likely to remain so for the foreseeable future,” he said. “Rising meat prices coupled with reduced disposable income continue to have a negative effect on sales.

“Our performance is clearly most unsatisfactory and we have been taking a number of steps designed to improve sales in the current market.”

He said the group had been “greatly encouraged” by the “very high customer loyalty” thanks to its focus on quality and value for money.

“The data showed footfall to be consistently high across the estate, but that average spend is very low at around £4. We consider there to be an opportunity to sell add on lines to our existing customers, and so increase the average spend.

“Currently our narrow product range results in an inefficient use of space in store, but does give us the opportunity to easily introduce new lines within the current store format.

“Customers indicated that they would enthusiastically welcome the introduction of a broadened range of home style products, such as desserts and side dishes. We believe this represents an opportunity on both the hot and fresh side of our retail business.”

Many of the new products designed to complement the meat business will be made in store.

Crawshaw hopes to turn ‘Crawshaw Kitchen Classics’ into a sub brand in its own right.

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