December 2021 - 33

FARM MARKET & AGRITOURISM
Worker numbers dependent on market performance
BRIAN MOYER
Penn State Extension
bfm3@psu.edu
One of the most common issues I
hear from retail farm markets is, " Can
my market sales support hiring another
employee? " To determine whether
we can or can't, we need to know how
our market is performing and what
analytics we can use to improve market
performance and profitability so we can
make informed decisions.
There are many different analytics we
can use, but I'm going to focus on sales per
square foot.
This is a great way of knowing how
your market is performing. It can help
you identify strong and weak departments
of your market. Sales per square foot is
calculated by taking your total gross sales
for the year and dividing it by the total
square footage of the sales space. Don't
include space used for office, storage,
prep, etc., just the space where product is
displayed and sold.
Total annual gross sales divided by total
square footage equals sales per square foot.
How does the sales per square foot
measure against other farm stores as an
industry? This figure is hard to find for our
industry, but for small grocery retail the
figure to shoot for is $500 per square foot.
To improve the sales per square foot
number we can focus on a few things.
1. Market layout
Take a critical look at your market
from the entry to the checkout. Are
you using your displays and lighting
to highlight the products to their full
potential? Unclutter the store. Messy or
cluttered areas will confuse customers
and not encourage sales.
Do you need to revisit your floor
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plan? Your floor plan should guide how
your customers move through the space
and guide your product placement. Is
the signage consistent and attractive?
Remember, signage is your " secret
salesperson. " Place staple and popular
items strategically so customers must
move through most of the sales floor to
get to them exposing them to most of your
offerings. Where is milk usually located in
a grocery store? In the back of the store.
2. Cross-selling
Create packages or bundles of products
that go together. This can increase the
number of transactions or " basket value. "
Good signage can also help with crossselling.
One of the best ones I've seen was a
sign for green beans. Yes, green beans. The
sign said, " Green Beans .99. Goes well with
our new potatoes and smoked country
ham. " The sign takes you from thinking
about purchasing beans to thinking about
a ham supper!
3. Encourage customers to stick
around
Our customers aren't always in a hurry.
Your market is a destination. There are
reasons why they come to the market. Do
we know what those reasons are? Use that
information to create more reasons for
them to hang around. Research shows that
the longer customers stay in our markets,
the more they tend to purchase.
Let's not forget the appearance of our
market on the outside. Create inviting
displays outside of the market that can help
increase the number of people who visit
your market each day.
Of course, most of the information is
in your point of sale (POS) system. How
often are you reviewing that POS data, and
what are you doing with it to improve your
market performance?
Lastly, a good rule of thumb to
determine how many employees your
business can support, is to look at your
annual gross sales. For retail farm markets,
20-23% of gross sales is a common method
for supporting employees. FGN
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December 2021

Table of Contents for the Digital Edition of December 2021
