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The grocery around the corner
16:00 Fri 18 Apr 2008 - Elena Koinova
 

He often compares his life to voluntary penal servitude, garnered with a lot of thinking. While previously he had the time to gaze at tree leaves undulating, now he watches the weather forecast to decide what stock to take and how much.

Stephan Nikolaev, the owner of a small grocery shop on Assen Zlatarov Street in Sofia, wakes up at 4-4.30am, except on Sundays when he’s catching up with sleep. The remainder of the time he plays his own version of the survivor game.

To survive on the produce vending market is not an easy game at all. “Many think it is like football, but it is not,” Nikolaev says, who picked the grocery business six or seven years ago to feed his family. “To survive, it takes tons of energy and being constantly on the alert.”

If he shows up at the grocery bourse late, he will end up buying the dregs and clients will swiftly switch shop. If a certain variety of fruit or vegetable is missing, the consumer will go to the market across the street. If his vigilance fails him for a minute, he might end up buying smushy lettuce that clients will paw through… and shun.
“Then you feel as if you have played your part wrong and the audience boos you,” he says. “So you can lose it all in one day, because if you fail to make the sales you’ll have no money to buy with the next day.”

And a grocer with the business formula of Nikolaev’s needs every single client. He keeps prices very low and relies on high turnover to stay afloat. One 18kg to 19kg cardboard box of bananas, for example, generates between two and four leva profit, Nikolaev says. Two if a kilo is overly ripened and takes time and price reduction to sell, and four if all gets sold. “And you don’t sell dozens of boxes of banana a day,” he says.

So client satisfaction is that keyword on the grocer’s mind, one that makes him travel three times a day to the bourse when an item is missing or incessantly invent those little marketing tricks to cajole every client into returning again and again.

That brainstorming began right from the start. This seemingly obscure shop introduced to Sofians the select-for-yourself formula some seven years ago. Nikolaev wants no patent for that approach because he himself appropriated it from abroad. Though it creates him that daily headache with old ladies stealing, he simply noticed that clients loved the idea of choosing on their own. Touching when shopping does bring that sense of belonging and makes one willing to buy.

Ever since, the smallish innovations keep popping up once every three or four days, to create the illusion of a change with clients and to give competitors something to imitate, he says, joking.

Re-ordering the items makes a difference. When putting the red apple varieties one next to the other for a couple of days, picking one up and placing it elsewhere helps clients think there’s more than the day before.

Or introducing the pomelo, that sweet Chinese variety of citrus fruit. The trick here was of a different kind, Nikolaev says. He ran the fruit at a lev cheaper than its wholesale price and for a week competitors would ransack all the bourses in town wondering where he bought it for as low a price.

This marketing trick with an exotic item is an expensive venture, though, and he rarely resorts to it. A day’s work brings brings between 40 and 70 – on heydays 100 – leva in profit and he has to pay wages, for fuel, taxes and social security contributions.

The introduction of the flat tax hit him hard, just like so many entrepreneurs who used to be in the zero tax bracket before. Paying that 10 per cent rate plus social security contributions for those two staff and himself costs him 630 leva, double the expense of 300 leva last year. For this reason, he can hardly afford to keep more people on the payroll. Just a cashier and a stock attendant.

Trade with quixotic groceries sometimes pays off, though, especially if done carefully and timely. The pomelo showed up on Nikolaev’s shop shelves only after the large grocery stores – there are several of the kind in Sofia – had familiarised the public with the item. And at a price one to two leva lower than elsewhere. Clients this way buy it and get used to the idea that this small shop brings the same variety as the big one – which it does, and often of a better quality.

So the buyer-count on a good day – when it is sunny or a holiday – reaches up to 250 people. He is happy when on Monday, on re-opening after a day off, a client asks him where he’s been. “Wanted you to make the difference,” he would answer, referring to the competition open Sundays.

The difference Nikolaev wants felt is his underlying message to the client: “Go for the cheap and fresh.”

“I prefer the lowest prices, otherwise you lose and become an actor in the anecdote where they ask you why you print a $103 banknote and you answer because that’s how much it costs when you calculate the printing, ink and paper,” he says.

Keeping a business at $100 and still earn is no easy job, yet keeps Nikolaev more physically fit than a decade ago and always on the alert. A fire-dancer job.

 
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