Starting a deli can be a great way to enter the food business. Delis offer a wide variety of ready-to-eat foods, including sandwiches, salads, soups, and desserts. They can be found in grocery stores, convenience stores, and even some gas stations.
Before starting a deli, there are a few things to keep in mind. First, it is important to choose a location that is convenient for customers. Second, the deli should have a well-equipped kitchen with plenty of refrigeration and storage space.
Third, the menu should offer a variety of options to appeal to a wide range of customers. Fourth, it is important to hire experienced staff who are familiar with food safety regulations. With careful planning and execution, starting a deli can be a rewarding and profitable endeavor.
The fine food retail industry caters to the growing number of customers willing to pay a premium for niche products and regional specialties. Learn how to open your own delicatessen from our practical guide.
This guide will cover the following topics:
- Research your target audience/market
- Decide what you’ll need to sell
- Consider your customer personas
- Marketing and promoting your business
- You could buy an existing business venture
How to start a Deli
Starting a deli may seem like a daunting task, but with careful planning and execution it can be a successful endeavor. The first step is to choose the right location. Look for a high-traffic area with ample parking and good visibility from the street. Next, you will need to secure the necessary permits and licenses.
Once that is taken care of, you can start working on the interior of your deli. Decide what type of atmosphere you want to create and choose your decor accordingly. Then, stock your shelves with all the essentials, from sandwich meats and cheeses to specialty items like olives and pickles.
And finally, don’t forget to create a signature sandwich or two that will have customers coming back for more. With these tips in mind, you’ll be well on your way to starting a successful deli.
The UK deli market
Every year, as many as 4 billion sandwiches are purchased from retail and eating outlets in the UK.
Experts estimate that the sandwich sector in the UK is worth over £8 billion a year and has over 300,000 employees. UK sandwich bars number between 12,000 and 15,000, but the sandwich game is dominated by big-name retailers – Subway has the top spot, followed by Greggs and Tesco.
As consumers desire healthier, more diverse and higher-quality ingredients than can be found in Greggs or Subway, the foodie revolution has resulted in an increase of 65% in independent supermarkets, which includes small delis and grocers.
In addition to health-conscious consumers, food journalist Bee Wilson says players in the deli industry should also focus on the increase in veganism (with as many as 3 million Brits identifying as vegan).
According to Wilson, the great question for small sandwich businesses is whether they can develop vegetarian and vegan sandwiches that people will eat. ‘For all our talk of plant-based diets, sandwiches, as a rule, are still very much focused on processed meat and cheese.’
The rules and regulations for opening a deli
It’s important to follow the same regulations when opening a deli as you would when opening a restaurant.
Food safety regulations include a number of requirements that you must meet. To open your deli, you’ll need to register the premises with your local authority’s environmental health department at least 28 days beforehand.
This process is free of charge. You must allow an official from your local government to inspect the facilities you’ll be using to prepare food and ensure they’re safe and hygienic. Visit the UK Government website to register for a visit from your local authority.
The Hazard Analysis and Critical Control Point (HACCP) Principles are also mandatory for new business owners. You can use this plan to ensure that your food is free from biological, chemical, and physical hazards, as well as to identify any potential hazards.
You’ll also be required to comply with any rules established by the Food Standards Agency – a government body providing guidelines on hygiene standards, sampling, labelling, and traceability before opening your deli.
Lastly, if you wish to sell alcohol, you will need to obtain a premises license. Additionally, you will be able to play live and recorded music and serve hot food and drinks after 11 p.m.
Visit the license finder on Gov.uk for more information about how to obtain the licenses above.
Research your target market
You need to thoroughly research your market before you launch your business. Learn as much as you can about the demand for the products you intend to stock, as well as the level of competition within your chosen business sector.
A delicatessen will only succeed if there is a large demand for it in your area. Even though consumers’ tastes have evolved, supermarkets (including discounters like Lidl and Aldi) are now selling a wide range of delicatessen items, as are many convenience stores and large food retailers like Marks & Spencer. Additionally, supermarkets offer a variety of ready-made continental-style meals, so that shoppers don’t have to purchase the individual ingredients in order to prepare a new and exciting meal.
Developing a unique deli culture is essential – the Guild of Fine Food says independent delis should take advantage of two key differences between them and supermarkets by stocking a wide variety of quality products and having staff that can discuss them intelligently with customers.
Likewise, consumers can now order a large variety of speciality fine foods online and by mail order.
Identify how many other outlets already sell delicatessen items in your area by checking out the competition first. Find out what ethnicities reside within your local area. Some of these outlets may not compete directly with you because you intend to set up a very specialized store. For example, you may plan to stock mostly Italian, Spanish or Polish products.
Make sure you visit as many competing outlets as possible so you can determine the following:
- What range of products and services they offer
- What prices they charge
- What are their opening hours
- What type of customer they attract
- Whether their items are attractively displayed
- Whether all the food looks fresh and appealing
- Whether the premises and fittings are modern and hygienic
- How knowledgeable and helpful their staff are
You’ll likely immediately see that there is a need for a delicatessen that specializes in certain types of products.
Trade and wholesale customers
Be sure not to overlook the possibility of serving the catering trade, especially if you live near bars and restaurants that serve continental food. Consider, for example, asking local Italian restaurants to place regular orders if you want to offer a wide variety of Italian fine foods and wines. Perhaps you propose to make up some dishes yourself, such as pâtés.
To show potential trade customers the quality of your products, bring along a few samples. You could contact local catering outlets with a trade price list if you get a positive response. Don’t forget to take delivery costs into account when setting your trade tariff.
Check out future developments
Location is very important when it comes to your outlet. The ideal situation would be to have plenty of passing traffic as well as ample and easy parking nearby. There should be no plans to build new roads that would bypass your shop, nor should there be any plans to restrict parking near your shop.
Consider the type of people you want to attract carefully – does your proposed location already appeal to this kind of clientele? There may be several up-market retail outlets or restaurants in the immediate area, or office workers may be the area’s key clients.
Remember that market research is an ongoing process. Consult with your customers once your delicatessen opens. Learn what they like and dislike and ask if they would like you to sell anything you don’t currently carry. Make a list of products that sell well and those that don’t.
Decide what to sell
You will probably decide what kind of products to sell based on:
- Your target market. Specialty ranges are available in all delicatessens, but some stock very exclusive items, such as foie gras and caviar, because of their affluence.
- Your local ethnicity may affect whether you stock items from a specific country, for example, all things Spanish, Italian, or Polish.
- Your specialty products will include cheese, coffees, smoked meats, salamis, salads, etc.
- The size of your outlet
Your product line is very broad, but you are probably going to sell these items:
- Meats, sausages, and pâtés – these may come from different European countries, and you might decide to make some yourself
- The customer can choose from a wide selection of cheeses stocked and cut for them
- Including pasta, sauces, oils, tinned goods, speciality teas and coffees
- Wet delicatessens sell salads, olives, dips, smoked or soused fish, pickles, gherkins, and other items
- Make-your-own dishes – this could include quiche, pizza, samosas, pies, lasagne, stuffed vegetables and so on
- A selection of luxury continental-style cakes, cookies, and chocolates
- Alongside soft drinks like fruit juice
- You may sell wines and spirits from multiple countries if your delicatessen sells alcohol
- Alcohol-based desserts, pastries and ice creams
- Exotic fruits and vegetables if space allows
- Specialty sandwiches, rolls or bagels are items for the lunchtime trade. These can be prepared yourself or purchased ready-made.
- packaged snacks like luxury crisps and nuts, and unusual specialities like biltong or beef jerky pieces
- bakery products – such as continental breads including ciabatta, focaccia and so on
- Fairtrade products such as teas, coffees, honey, exotic fruits and so on
Often, delicatessens offer customers items that aren’t readily available in supermarkets such as high-quality foods. The Guild of Fine Food Retailers can assist independent deli owners in finding products not available in mainstream supermarkets. There is a good chance you stock a range of local products and some organics. Additionally, you may want to stock ‘free from’ products such as gluten-free and dairy-free.
You should make sure to monitor stock carefully and discount anything approaching its best before or use by date. Many of the lines you stock will have a limited shelf life, so monitor the stock carefully.
It is important that your display looks fresh and inviting so get rid of any items that look stale or dried out.
Services to offer
Besides offering fine foods, wines and spirits, you might also decide to offer catering services to your customers. Examples include:
- Local businesses and the general public can take advantage of our full catering service
- Café sales if you have enough room in your premises
- A luxury hamper delivery service
There are likely to be two main peaks in demand. In the summer, especially if the weather is nice, many of the items you will sell are suitable for salad-type meals that can be prepared quickly.
The period leading up to Christmas is also a good time for the delicatessen sector since people stock up on holiday luxuries. You should make sure your inventory includes gift-worthy products since many items will be purchased as gifts. Put together a variety of hampers containing different types of food and wine.
Establish your customer profiles
It is typical for people who care enough about what they eat to go to a delicatessen and – in most cases – to pay an extra bit for something special. The majority of them are fairly affluent and have a fair amount of disposable income. Local delis often have a core of regular customers who visit quite frequently.
You might also attract tourists and day trippers, students, workers on their lunch break, local retirees and shoppers if your deli has a cafe and/or takeaway counter.
There are delis which cater to a specific section of the local community, such as Polish residents or Italians. Often incorporating a cafe, they serve as a place for community members to come together and buy products from a particular country.
You may want to consider the possibility of targeting wholesalers and businesses in the area, such as hotels and restaurants. Among these might be wholesale buyers of meat and charcuterie, cheese, pâtés, quiches, and other types of ready-made dishes.
Special offers and discounts
By offering special deals and discounts you may decide to target a particular type of customer. Consider offering discounts to pensioners or students on certain mornings, or lunchtime meal deals for workers and students. To encourage repeat customers, consider offering a loyalty program. Whenever you buy in quantity from a wholesale customer, you are likely to offer them a special trade discount.
Promoting your business
This next section will discuss how to promote and market your brand new small business venture.
The right image
Your delicatessen must present the right image to customers. In order to encourage existing customers to return regularly, every aspect of your outlet should be designed to encourage them to keep coming back.
Your outlet should be as bright and attractive as possible from the outside. Ensure that signs are well-made, clean, and in good condition. Make sure your delicatessen’s colours, lettering and design convey the right message. Consider things like keeping your windows spotless clean and the condition of your paintwork when it comes to determining whether your delicatessen looks up-and-coming or old and run-down.
A discerning customer base will probably be buying a wide range of luxury items from you. As well as expecting high quality, unusual products, they will also expect everything they buy to be in perfect condition. One of your most powerful marketing tools is your display of charcuterie, cheeses and other wet delicatessen items, which can entice customers to sample a wide range of products. A first-class state must be maintained for all the items, however. In addition to regularly slicing off the ends of salamis, discoloured meat slices should be disposed of hygienically. The supermarkets are your main competitors, and everyone knows that their fresh food counters are hygienic and of high quality.
In addition to your staff, your delicatessen’s image is greatly influenced by them. They should be helpful, knowledgeable and friendly. A basic uniform might be a good idea. When gaining repeat business, it is vital to adhere to high standards of food preparation and customer service.
Your delicatessen’s advertising and promotion
If you are the owner of the best delicatessen in town, you’ll want to make sure potential customers know about you and what you have to offer.
You can promote your deli in a number of ways:
- Place an ad in your local newspaper and any local directories. Why not advertise in ‘What’s on’ type publications, particularly those featuring cultural activities (theatres, galleries, museums and so on) likely to appeal to your target market
- Set up your own website
- Utilise multiple social media platforms
- Become listed in online directories and on other websites that have links to speciality and fine food businesses
- Maintain an exciting window display that changes frequently. Featuring products from different countries, as well as local specialties, could be a great idea
- If you offer free samples on the counter to entice customers to change things up
- Print leaflets and price lists to distribute to local caterers or nearby office buildings
- Try to encourage repeat business by offering tastings and giving customers recipes
- Attend and participate in local and regional events like food fairs and festivals
If you keep them clean and looking smart, your vehicles can serve as an excellent advertisement for your business.
The demand for ethical products that help producers and farmers in developing countries has increased in recent years. It is possible for you to meet this demand by stocking a range of Fairtrade products such as tea, coffee, honey, etc. By doing this, you will demonstrate to potential customers that your company is ethical and committed to ending global poverty. You can also differentiate yourself from your competitors by offering Fairtrade products.
What is Fairtrade
By ensuring that disadvantaged producers and farmers receive a fair price for their work and products, Fairtrade ensures a fair deal for them. Most people are willing to pay a little more for Fairtrade products than similar ones – but it helps producers become self-sufficient if they pay a little extra. The easy-to-recognize Fairtrade Mark appears on all Fairtrade products, and there is a wide selection available.
How does it work
Producers of Fairtrade goods receive a set minimum price for their goods, providing them with a living wage. In addition, producers receive an extra sum of money to invest in their business or community. This is referred to as the ‘social premium’.
Producers of Fairtrade products must meet certain requirements in return. The requirements are set by Fairtrade International. Fairtrade Marks can only be applied to products by licensees registered with the Fairtrade Foundation, such as importers and manufacturers. As a result, you are likely to buy Fairtrade products either directly from manufacturers or importers, or you may buy them from wholesalers or distributors registered in the UK.
A list of UK wholesalers that sell Fairtrade products to retailers can be found on the Fairtrade Foundation website.
Generally, you can expect to pay a little more for Fairtrade goods if you buy them from a wholesaler or registered manufacturer. Trade prices are slightly higher to cover the set price and social premium that are paid to farmers and producers, as well as supply chain costs and certification and licensing fees.
It’s probably okay to charge a little more for Fairtrade products, even though trade prices are higher. You may also benefit from additional sales. Because the Fairtrade Foundation doesn’t set retail prices, the markup you add is completely up to you. In setting your prices, keep in mind the purposes and aims of Fairtrade as you cover your costs and retain a healthy profit margin. Fairtrade items should not have higher profit margins than similar products, according to the Fairtrade Foundation.
Promoting Fairtrade goods
Your business can benefit from offering Fairtrade products since ethically aware consumers appreciate such products. Making sure potential customers are aware that you provide Fairtrade products is therefore critical.
Providing you with helpful materials and advice on how to advertise your Fairtrade ranges is the Fairtrade Foundation’s job. The Foundation must approve promotional materials, like posters or leaflets, that feature the Fairtrade Mark.
The Fairtrade Foundation promotes Fairtrade during Fairtrade Fortnight. If you want to make customers aware of the products you offer, now could be a good time. You could, for instance, hold a Fairtrade tasting event. Promote Fairtrade in your outlet and tell customers what Fairtrade products you carry with the use of posters.
Where to find out more
It oversees our retail sector in the UK, as well as other aspects of Fairtrade. The Fairtrade Foundation is an international movement supporting Fairtrade. Visit the Fairtrade Foundation website to learn more about Fairtrade, the range of products available and how to become involved.
Buying an existing business could be an option
Perhaps you will decide it is the right approach for you to purchase an existing delicatessen business, rather than starting your own up from scratch. The advantages to this are that you will be walking into an already reputable establishment, one that has customers, staff, premises, and products.
However, keep in mind that buying a business can be extremely risky, as it is a highly expensive approach that and a daunting task if you don’t have the right level of experience. You will need to be armed with experience, knowledge of the industry, and staff members that are professional.
You should predetermine the genuine trading and financial position, so that the price you pay for the business is not too high. There are a number of lenders which will support future business owners with specialist Delicatessen business finance.
A franchise can be a good middle ground between starting from scratch and buying an existing business. You will still set up your own business if you purchase a franchise, but you will benefit from the expertise, resources, and reputation of a successful business.
The deli, fine food, and related industries have several franchise opportunities. Although each scheme is different, there are several key aspects common to all:
- Franchisees will remain self-employed but will use the brand (corporate colors, logos, trade names, etc.) of the franchisor
- The franchisee will pay the franchisor a fee – this can be an upfront investment, a monthly fee, or a combination of both
- Franchisees and franchisors have certain obligations to fulfil and minimum standards to maintain
You may receive training, marketing assistance, and advice and support on a variety of business and technical matters from your franchisor. In most cases, your franchisor will provide most or all your stock.
Each of these points will be detailed in your franchise agreement or contract, which you and your franchisor will sign. You will also negotiate other matters in the franchise agreement, such as the duration of any territorial exclusivity due to you.
Compare the terms of different franchisors before entering into a franchise agreement to make sure you are getting a good deal. You should always consult your lawyer before signing anything.
Visit Franchise Info for more information about franchising. You can also obtain information from the British Franchise Association (BFA).