Business For Sale

Iconic Waiheke business with a nationwidewide reputation. Main street location on a prime Oneroa village site. Ample parking. Thriving despite the market conditions.

Purchase Price *
Leasehold Going Concern   
Tangible Assets    69,000
Intangible Assets    631,000
   
Total Purchase Price of Leasehold Going Concern    $700,000
Plus Stock at valuation at time of sale   

* Zero rated for GST as per the Goods and Services Tax Act 1985, Section 11 (1) m

History
Originally there were two shops, one with frontage on Oue Street and other Oceanview Road but these were amalgamated to form the premises as they are today. During the late 90s the main competitor, a Four Square superette just down the street in the centre of the village, was closed and amalgamated into the new supermarket, Woolworths, in Ostend. This left Waiheke Fruit and Veg and The Family Barrow (now the Oneroa Four Square) to fill the gap left in Oneroa for a shop selling produce and groceries.




Business Strategy

The strategy has been to increase business without taking on any significant debt burden to finance expansion, which has been funded from cash flow. This has meant a hands-on approach but has allowed the owner to reduce the number of hours worked in the shop as she has been able to employ more staff.

The Vendor had a vision to take the popular name “The Top Shop” and make the business “top” in all aspects – top quality produce, top products, top people, top location, top service.

Given that fruit and veg are a generic item in a highly competitive market (Woolworths Supermarket, Four Square, Pricecutter shops) the Vendor established a strategy of distinguishing the shop in several unique ways:

1.    An emphasis on supplying top quality fruit and veg – sourced by two contracted astute buyers
2.    Ongoing development of brands and product mix - including 25 product lines exclusive to Waiheke and Oneroa
3.    An emphasis on organic produce
4.    A source of speciality delicatessen goods e.g. Sabato
5.    A place where locally grown produce and artisan products can be found.
6.    A range of own packaged goods
7.    Shop layout that maximizes space and ease of shopping
8.    An innovative labeling system that provides customers with all the information about products, including country of origin and Maori name.
9.    Made the business customer-focused by listening to their needs and providing solutions.
10. Regular in-store demonstrations and fortnightly newsletters to inform customers of products and usage
11. Increased community ownership by associating the brand with charitable work overseas

Growth

These business strategies have resulted in steady growth over the last three years, establishing the business as a centre of excellence. This has appealed to the more sophisticated consumers who are increasingly coming to live on the island. In order to reach these customers the Vendor has established an email marketing strategy to inform consumers of new products, recipes and promotions. 

Future growth will come from continuing population growth as well continuous innovation in products and marketing. Untapped potential lies in supplying the wedding and restaurant market. Exact data about the number of weddings on Waiheke is impossible to obtain.  Although this information is supplied to The Department of Internal Affairs on the registration of marriages documents it is not collated in an area by area format and so is not passed on the Department of
Statistics for public consumption.

However, by talking to Marriage Celebrants and venues known to host a large number of weddings the figure can be put conservatively at around 1000. This figure represents approx. 5% of the weddings throughout New Zealand annually (roughly 21,000 in 2007 Source: Department of Statistics). With Waiheke Island residents (approx 8000) only accounting for a negligible percentage of the total population of New Zealand (4,100,000) the number of marriages on the island is massively out of proportion. Part of this could be from the 2,000 marriages registered to overseas residents in 2007. Overseas residents marrying in New Zealand include wedding tourists and expat New Zealanders returning to celebrate their marriage with friends and family. It is obvious Waiheke gets a large proportion of this market and the wedding market in particular relative to its size.

Developing this potential is one way a Purchaser can continue to increase the turnover and profitability. Another could be to extend the delicatessen service to include a coffee bar and or café. This would require increased floor area, itself a goal of the landlords. The landlords want to develop the shops (the block also includes the BNZ bank, a liquor outlet, a jewelers and Waiheke Flower Company) and have indicated to the Vendor that they would be keen to see Waiheke Fruit and Veg develop further as their cornerstone tenant  with a café/coffee bar as an added feature.

A further possible avenue for growth lies in the establishment of a delivery service direct to homes. This service could be used by the elderly, holiday renters or commuters.


Business Overview
•    The business has an excellent reputation locally.
•    It has an established cashflow.
•    Location on the busiest main street in the largest village on Waiheke.
•    Good on and off street parking in front of and to the side of the building.
•    Flexible employment arrangements with experienced staff
•    Systems are in place that allocate revenue to profit centres.
•    A lease until June 2010 with a rights of renewal is both positive and negative. The owners of the building are reviewing how they might upgrade the current premises. This may or may not happen depending on their ability to secure increased access to the reticulated sewage system owned by Auckland City. It is currently said to be at full capacity. The landlords have indicated they are very keen to secure Waiheke Fruit and Veg as the cornerstone tenant. On the other hand the lack of a fixed lease allows the business owner to enter into a secure tenancy with another landlord at some other suitable site in Oneroa.


Lease

The shop currently has a lease until June 2010 with a right of renewal until 2016. The owners of the site want to develop it further and then establish new leases for all their tenants. Their plans have several administrative hurdles to overcome but they have indicated to the Vendor that they see the continued success of waiheke fruit and veg as key to their development plans.