Resort trading: Sun, sea and selling on a summer holiday

So you’ve arrived in Cornwall for your summer break. You’ve unpacked the car, checked into your hotel, changed into your beach shorts and are ready to hit the surf. But there’s a problem. You’ve left your wetsuit at home and need to buy a new one. So where do you go? Quiksilver? Boardwalk? Or how about Asda, whose Cornwall stores, as you’ve just discovered from the lady on reception, stock wetsuits and body boards throughout the summer months.

In resort towns such as Blackpool, Newquay and Weston-super-Mare, retailing during the summer season is an entirely different proposition to the rest of the year. Data on the local demographic goes out the window as a hodgepodge of human kind descends on your store.

Surfing the highs and lows

The challenges are multifaceted. How should you adjust your product range to satisfy demand? How can you ensure staffing levels are appropriate for the time of year and how do you deal with the supply chain and operational issues associated with major peaks and troughs in demand?

Getting the right mix of product into store is the obvious, yet crucial, first requirement.

Asda has identified 28 stores that it classifies as “summer seasonal”. Within each individual store it tweaks the range to reflect the change in customer base, hence why stores located in surfing hot spots such as Newquay and Penzance stock surf gear during the summer and other seasonal stores upweight convenience items such as beer, soft drinks and snacks.

“The typical basket changes significantly during the course of the year,” says an Asda spokesman. “While there is a steady base of local customers whose shopping habits reflect that of a regular shop, the influx of holiday makers brings greater demand for convenience type shopping from day trippers and campers and caravaners.”

The range of products on sale at a Spar located within a holiday park will differ significantly from a typical high street store. In addition to a standard convenience offer, holiday makers can buy toys, gifts and local produce unique to the area. “Toys and gifts are a significant part of a holiday park retail offer and that can range from straightforward toys, beach items and swimming pool items to traditional gifts that children will take home for grandparents such as sticks of rock or local fudge,” says Mark Harper, operations director for Bourne Leisure, which recently signed a deal with Spar to service its 36 Haven Holiday Parks across England, Scotland and Wales and three Butlins resorts in Bognor Regis, Skegness and Minehead.

And what of non-food retailers? Logically, it follows that if grocery stores stock more beer and soft drinks in resort towns, clothing stores should stock more sandals and sunglasses. Not so, according to Bob Jolley, commercial director at retail software supplier Maple Lake. “If you think about what you do when you’re going on holiday, you actually buy everything you think you’re going to need before you go. What happens is when people get there they realise they’ve got the sandals but they’ve got nothing to go out in in the evening.”

Clothing retailer White Stuff works on the principle that customers don’t differ significantly across its store estate. “We find that our customer is often very similar wherever, whether it be Edinburgh or Exeter, they have similar values and similar beliefs in what they love about our brand,” says Neil Hobson, area manager for the East and South. “We actually go the other way and try to be consistent rather than overly different in the resorts to show customers that just because we’re in a resort and it’s different to what you’re used to, it’s still a White Stuff store.”

The quiet times

The greater challenge for Hobson is addressing the fact that for seven months of the year, resort stores are so much quieter than at peak time during the summer. This poses problems not just with supply chain management but with people management too.

“I think the biggest challenge is developing that capability and consistency through the winter when you have a much smaller team. When you start recruiting during the summer, the team can sometimes triple or quadruple in size, the challenge is how to get the new people up to speed as quickly as possible so that they understand your brand, your culture, the product and how we operate so that there’s no kind of lag.”

Size can also be an issue for many resort retailers. Seaside stores, in particular, tend to be smaller than stores in urban locations. “We have to be much cleverer in terms of what core product we inject into them,” says Hobson. “Often the thing with core product and clothing is that the core options are the plain options and what you end up with if you’re not careful is a shop full of very boring, plain products when actually the interest pieces are the ones that bring it to life.”

Space constraints have other drawbacks. “Some of our resort shops don’t have any back areas so we have to find a solution like renting garages in the summer down the road. You have to be quite creative with your solutions,” says Hobson.

Arguably the biggest operational challenge of all is managing stock levels in a store that experiences significant peaks and troughs in demand. As Jolley notes: “Any town or city based store is going to have a permanent catchment of ‘x’ people so you’ve got a good idea of how much you’re going to sell, but of course a seaside resort is additionally going to have the number of people there on holiday at the time. Locals will still be the core of the trading, but the real peaks will come from the influx of holiday makers.”

For non-food retailers, forecasting demand and allocating ranges for stores on an individual basis is near impossible so retailers will instead cluster groups of stores based on differentials. Unfortunately, it’s rarely as simple as clustering all resort stores together. The performance of stores will differ based on other characteristics such as size, location, number of floors, the consumer demographic and the store’s competitive position on the high street.

“What they want to be able to do is pick out where trends are different to the average,” says Jolley. “If they’ve got 40 stores within a cluster, they want to be able to look historically from the same period last year and see if any of those stores peak differently from the average so they can refine the way those stores are clustered.”

Clustering is all well and good where the differentials are rigid, but how can you plan for variable factors? Holiday resorts, in particular, are at the whim of the weather. An inclement summer can severely skew the volume and variety of what holiday makers put in their basket. Andy Cairns, director of retail operations at retail software vendor Cegid, says that in this event there are limits to how responsive apparel retailers can be.

“If you look at some of the retailers now, they’re phasing on a monthly basis so they’re able to change the range every month. Being able to react to weather conditions, however, is difficult, particularly if you’re buying in the Far East three months in advance.”

Grocery retailers on the other hand have the benefit of working to much shorter lead times and can respond to fluctuating demand on an almost daily basis. Asda forecasts demand for each of its summer seasonal stores individually, as weekly sales can as much as double between February and August. Sales rise and fall significantly depending on the weather so the supply team reviews weather reports each day and alters demand forecasts accordingly.

Local events, such as festivals and parades, can also impact on demand. Sainsbury’s mines the knowledge of its local staff to predict how local goings on will impact on individual stores. “Store colleagues are a really important resource - they live as well as work in the local area and they know what impact any upcoming season or major event is going to have,” says Sainsbury’s store openings and events manager Christian Lacey.

So, the key to running a successful resort store is a complex blend of local knowledge, a flexible supply chain, a crack team of employees and an eclectic mix of products. Get it right and with a bit of luck your next consumer will come in for a can of beans and leave with a body board.