We give you the low-down on the sandwich shop industry to help you make a fat wedge through selling one of the nation's most popular snacks.
Ever since 1762, when the Earl of Sandwich famously demanded that his food be placed between slices of bread so that he could continue his card game, the simple delight of the sandwich has been appreciated.
The sandwich industry is estimated to be worth £2.8bn, and it is estimated that over 60% of us buy a sandwich at least once a year.
However, the industry is fiercely competitive, and if you open your own shop you will be competing against supermarkets, workplace canteens, cafes, bakers and, of course, other sandwich shops.
What is a sandwich shop?
Sandwiches are only a small part of what is sold in a sandwich shop. Your customers will also want other breadstuffs such as rolls, baguettes and ciabatta, as well as extras like drinks, soups, crisps and chocolates. Some ‘sandwich shops’ provide pastries and other hot foods, but we shall steer clear of the café world and remain focused on the sandwich.
You have the option of buying in pre-packed sandwiches, or making your own on site. By making your own you have greater creative input and have the benefit of being able to advertise your goods as being ‘freshly made’. But it takes more work and time and you have to make sure that your recipes work.
Over the last few years there have been a lot of changes in the world of convenience food and there are now many specialist sandwich makers on the market. Some of the early sandwich specialists, such as Subway, O’Briens and Pret a Manger, are now market leaders; Pret’s turnover now exceeds £327m.
McDonalds, once the number one force in the fast-food industry, has also added sandwiches to the menu in a bid to keep up with the fast-changing market, and coffee hourses such as Starbucks and Coffee Republic have added sandwiches to their repertoire.
There are many big names to compete against, and while this may be daunting you would be well advised to find out how and why they have been successful.
Who is suited to it?
Anyone thinking of going into this business should enjoy meeting the general public. Each day you will be standing behind the counter face to face with the general public, listening to their wants, demands, suggestions, general conversation and, from time to time, their complaints (fair or otherwise). If this puts a shiver down your spine then it is likely that the sandwich business is not for you.
You should also have a passion for food as there is little point making a business out of something that you don’t care about.
Phil Brown, founder of Philpotts sandwiches, said: “You shouldn’t go into this type of business just to make money.
“You should do it because you can do it better than other people are currently doing it.”
How do I find my niche?
If you want to find a niche in the marketplace, visit similar venues and consider what you do and don’t like about their business.
You should find things you admire as well as things you cannot stand. If you are lucky and observant enough, you might spot a gap in the market which you can exploit.
Brown explains that the sandwich business has got a lot tougher since he began in the mid 1980s.
He said: “When I started in 1985 there was a gap in the market as there were no sandwich shops apart from in London.
“The only sandwiches available were poorly made and wrapped in cling film.”
For Brown the answer was clear; set up shops outside the capital that provided high quality freshly made food, and he was bound to find a hungry market. His example is a good one to follow.
Making a profit
Like most new businesses, you should expect to have to work hard.
Brown continues: “The hours are also long - you start at 6am and work until 4.30pm.
“People often aren’t aware of how much work you put is involved, they think that it’s just a bit of cheese and bread – there’s so much more.
“The standards in industry now are so high, anybody who doesn’t put everything will just fail.”
In order to make a profit you must research the business really thoroughly.
Knowing the prices and costs of everything that your business will have to pay is vital to your success.
Get accurate costs of all ingredients, packaging and overheads such as utilities, staff costs and other bills.
Plus, don’t forget the one person who never takes no for an answer – the taxman. He will always want his slice and won’t accept sandwiches.
Work out how much all your products are going to cost to make and how much you are going to sell them for.
Compare your prices to other businesses and undertake some first-hand research to see if people are prepared to pay the types of prices you plan on selling your goods for.
It is vital that you get feedback from the right people. If you are going to be selling to commuters then ask people near a railway station; if you are targeting students, check out your local university.
Once you have got your pricing sorted out, work out how many sandwiches you are going to have to sell to cover all your costs and make a profit on top.
If the figure is in the hundreds then you are probably not far off. But if you are going to be selling tens of thousands of sandwiches, you might have to think again.
Look for opportunities to take more business. Consider doing catering events, parties and deliveries. Go and meet the other businesses in your area; many of them could be a source of extra trade in the future.
Getting to know people is all-important, and building a rapport with your customers is essential - both for repeat business and for extra business.
Many people go to the same shop everyday because they like the people who run the shop, not necessarily because they have the best food.
Your customers are everything. They act as ambassadors,selling you as much as you sell yourself; they also give vital feedback about your food, and could be the source of extra business.
You never know when a person who has the power to make a big order could turn up at your counter.
Getting across to your customers initially can be one of the hardest things. A big promotion might the best way to attract attention initially. Look out for a deal you can offer which adds value to the customer while remaining cost-effective to you.
Offering free drinks and crisps with select sandwiches is the type of offer many outlets make, but don’t be content to follow the crowd – be creative!
Rules and Regulations
The Food Standards Agency (FSA) is the body invested with government responsibility for all food safety standards.
They can provide you with advice on all food hygiene matters and offers tailored information packs under the ‘Safer Food, Better Business’ banner. The catering pack wwill help you comply with the law and make your premises safe for the public; the information it contains covers all key areas on serving food, including contamination, cleaning, chilling, cooking, management and keeping a food diary.
To order this book contact the FSA on 0845 606 0667 or email firstname.lastname@example.org.
Currently, there is no law that states you must undertake formal training to open a sandwich shop.
However, you must ensure that you and anyone else working with food at your business has the appropriate level of training and/or supervision to do their job properly. The legal responsibility lies with the business owner, so make sure you have all the information you need.
Your business must also be registered with the local authorities, and you can – in all probability, you will - face inspections in the future.
A failed inspection is bad for your sandwich shop for a number of reasons. Legally, you could be closed down; commercially, you’ll receive bad publicity and referrals; and morally, people could be taken ill or even die from contaminated food.
In order to avoid such pitfalls you should learn the HACCP, which stands for ‘Hazard Analysis Critical Control Points’.
This is an internationally recognised and recommended system of food safety management that focuses on identifying the ‘critical points’ in a process which could compromise food safety hazards, and putting steps in place to prevent things going wrong.
For more information on HACCP, and other food hygiene legislation, click on the following link.
You might want to take a look at the rules and regulations section of our catering guide too, as the same restrictions on food preparation will apply. Click here to see our catering guide.
Here are some typical costs for essential sandwich shop equipment:
Glass counter £1400 - £2300
Glass door drinks merchandiser from £500
Integral multi-deck refrigerator display £1600
General kitchen utensils £300 (approximately)
Cash tills from £100
Please note equipment costs are based on the average costs of a number of suppliers, and it’s best to shop around your area to get the best price. Companies such as Jordon specialise in sandwich shop fit-outs, and will be happy to provide further information.
Keeping your stock costs down are also important. Just like sandwich ingredients, you may be able to buy stock at the supermarket and still make a profit, and it definitely pays to look for cheaper suppliers.
Wholesalers are one good option, as trade with businesses is typically the lifeblood of their business. However you need to be sure you know exactly what, and how much, you want, as traders like to do bulk deals. Also, be prepared to haggle!
The cost of rents can vary enormously, as area and location are key to the success of any business.
So beware buying or renting a property purely on the basis of price; if you are too far off the beaten track, you won’t catch any passing trade. On the other hand you need to avoid buying somewhere too expensive; else you’ll never make back your payment to the landlord.
Aim to find a place you can afford, but where there are also plenty of potential customers nearby. A large office block full of hungry workers is a top target; if you find one without much competition nearby then you are likely to be on to a winner if the rents are not too high.
Food Standards Agency
Tel: 020 7276 8829
Catering Equipment Suppliers' Association
Tel: 020 7793 3030