A Rare Lockdown Retail Success Story
(Bloomberg) -- The Gilchesters Organics flour mill was lucky when a year’s worth of paper sacks arrived in February, a month before the British prime minister, Boris Johnson, locked down the country because of the coronavirus.
The response from consumers was immediate: panicked at rationing in supermarkets and bare shelves as the food supply chain struggled in the early weeks of the pandemic, people flocked to independent millers like Gilchesters in Stamfordham, some 15 miles northwest of Newcastle upon Tyne.
“Our business model completely changed,” says Billie Wilkinson, 53, who runs the company with her husband, Andrew, 55.
Until then, the mill, situated on the site of a Roman fort on the path of Hadrian’s Wall, sold around 80 percent of its flour to bakeries, restaurants and wholesale customers in giant sacks. The remainder went to local shops, with a negligible number of mail orders direct to customers. But in the first month of lockdown, mail orders shot up 700 percent.
“People still wanted sacks of flour but everything changed completely,” says Wilkinson. The company had to process every mail order, picking and packing flour, and reduce its offering to meet unprecedented demand.
“During lockdown everyone decided they needed a bag of flour in their store cupboard,” says Andrew Wilkinson. “Industry couldn’t cope, we were inundated. We had to restrict access onto the website in order for us to cope with this phenomenal surge for small bags of flour.”
The company also had to educate customers not to hoard. The same was true in supermarkets: 2.1 million more people bought flour in the month leading up to March 22, according to data from Mintel, a market analyst. In April another 2 million bought an extra bag of flour, says Andrew Wilkinson.
For Gilchesters, the pressure was in maintaining delivery speed as supplies grew more scarce. Self-isolating staff reduced the number of people able to handle and fulfill orders from six to three. The volume of flour produced in that first month of lockdown was less than normal, because bakeries and restaurants stopped their orders as they closed.
“Everyone thinks that’s where the big money was made,” says Billie Wilkinson, but they’re wrong. “It was a different business in the first month.” Yet overall, throughout the pandemic, the company has “never milled more flour than we have now,” says her husband.
New individual customers that flocked to the company have stayed throughout the lockdown. Wilkinson keeps a folder of emails from customers thanking her for keeping their families fed; some offered to meet at a distance to offer home-baked cakes as a token of their appreciation.
The company has learned lessons about sourcing and staffing, as well as grown as a result of the pandemic.
“What proved a huge blessing was that we try to source everything locally, from pallets to packaging,” says Billie Wilkinson. “And if not local, at least the U.K.”
When borders shut and travel bans were enforced, that helped keep the business running—and could be an augur of preparations for January, when the U.K. is due to leave the European Union.
“That really helped because they were always just a phone call away, and you know they’re producing in the country,” she says. “It doesn’t have to be shipped for days to get to you.”
©2020 Bloomberg L.P.