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What is a Sweet Shop Business?
A sweet shop is a type of shop that sells sweets and other confectioneries. The first sweet shop in the world was launched in 1787 in Japan. They grew in popularity in the UK during the Victorian era, and once again after the end of food rationing during World War Two.
Although sweet shops began to decline in popularity over the past few decades, they have started to make a comeback with the number of traditional sweet shops in the UK increasing by more than 15% in recent years.
Sweet shops are now being appreciated as a staple of the British high street, meaning this could be the perfect time for you to set up your sweet shop business.
Different sweet shops may sell different types of confectioneries. The most common confectionery sold at sweet shops in the UK are:
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- Pick and mix sweets.
- Retro sweets, such as Black Jacks, Flying Saucers, Cola Cubes, and Bon Bons.
- Chocolate bars and other chocolate products.
- Hard-boiled sweets in a variety of flavours.
- Traditional flavoured sweets, such as aniseed, liquorice, chocolate limes, and blackcurrant.
- Old-fashioned sweets, such as Sherbet Lemons, Pear Drops, and Rhubarb and Custard.
- Chewy sweets.
- Jelly sweets.
- Gummy sweets.
- Sour sweets.
- Fudge, caramel, toffee and nougat.
- Popular sweet brands.
- Lollipops.
- Candyfloss.
- Chocolate covered nuts.
- Chewing gum and bubble gum.
- Mints.
- Sweets from other countries, including the USA, India and Belgium.
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Some sweet shops also choose to stock other products, such as crisps and other savoury snacks, ice cream, milkshakes, vegan products, cakes and other baked products.
When setting up a sweet shop business, it is recommended that you conduct some market research. This can help you decide what type of sweet shop you want to run and help you to make your sweet shop business a success.
Some questions you should consider are:
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- What types of sweets do you plan to sell?
- Do you plan to sell any other products?
- Where will your sweet shop be located?
- Who will your local competition be?
- What products do other sweet shops in your area sell and what are their price points?
- Will you trade exclusively in the shop, or will you offer an online service?
- Are you going to open an independent sweet shop, or will you operate as part of a franchise?
- Is your sweet shop business likely to be a seasonal or year-round business?
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Setting up a sweet shop business can be extremely lucrative and financially rewarding. It can be less time-consuming and stressful than other food businesses, as you usually do not make the food itself; instead, you will likely order your confectionery products and sell them for a marked-up price.
Types of Customers
Traditionally, a sweet shop’s target market is thought to be children, although many sweet shops are also popular with adults, especially those that also stock retro and traditional sweets.
You may choose to target specific customers or design your sweet shop business to attract customers of all ages and demographics.
When deciding the types of customers you hope to attract, there are several things you should consider:
The types of products you plan to sell:
The type of sweets and other products you sell can have a significant impact on the type of customers you attract. Some sweet shops choose to sell a large variety of products to ensure that different age groups and demographics are catered for, whereas others choose to focus on a particular theme or type of confectionery.
Your business identity:
The visual look and design of your sweet shop are some of the biggest ways you can demonstrate your business identity. For example, you could create a themed sweet shop to attract your target customers or a shop with traditional or vintage decor. You can also demonstrate your business identity through your business name, your logo and your products.
Your price points:
The cost of your products can influence your target market and the customers you are likely to attract. You can determine your price points based on the cost of the products, your overhead costs, your competitors’ prices and your location.
Equipment You Will Need
Setting up a sweet shop business can be a low investment enterprise, compared to other food or retail businesses. This is because less equipment is required to open a sweet shop, compared to other food businesses.
To help you plan your equipment requirements, below is a list of equipment that is typically required in a sweet shop.
Sweets display unit
There are multiple different types of display units you can use in your sweet shop. A display unit with sweet dispensers is great for displaying pick and mix sweets that customers can access themselves. Other display units and stands can be used to display multiple different types of sweets at one time in a way that is attractive to customers.
Display shelves
Display shelves can be used for displaying sweets that are in jars or the manufacturer’s packaging. Display shelving should reflect the design of your store and your business identity.
Display bins
These can be used for displaying larger sweets, such as pencil sweets, liquorice sticks, cable sweets and marshmallow twists. To make your sweet shop more attractive, your display bins should match the theme of your store, for example, a pirate-themed sweet shop could use barrels and treasure chests for its display cases.
Weighing scales
Weighing scales are recommended for measuring sweet quantities and for calculating the value of pick and mix sweets. The weighing scales should be big enough to hold a large number of sweets at one time.
Cash register and Point of Sales (POS) system
This is essential for recording sales and managing the financial aspects of your shop. It is recommended that you have a payment system whereby customers can pay cash, debit card or credit card for their purchases.
Jars
Often, manufacturers will package their sweets into less attractive plastic jars or cardboard boxes. You can use jars to display your products more attractively. Jars can also be used to display any confectionery you make or produce yourself.
Refrigeration or freezer equipment
If you plan to sell ice cream, milkshakes, or milk or cream products, you will need to invest in a fridge and freezer system. This ensures that any perishable stock remains safe to eat. Depending on the types of products you sell, you may need to install a fridge/freezer display cabinet. Alternatively, you could choose to install a fridge or freezer in the backroom of your shop.
Scoops, tongs and other serving equipment
You will need to provide multiple scoops and other serving equipment to prevent cross-contact between different allergens. The allergens customers could be most at risk of in a sweet shop, and which you must ensure have their own serving equipment, are nuts, gluten, egg and dairy.
Serving bags, boxes and containers
Many customers who visit a sweet shop will want to purchase multiple different types of sweets at one time. Offering packaging that allows them to take their sweets away can help to maximise your business. Using recyclable paper bags or cardboard containers is not only more environmentally friendly, but it will also cost you less money. You could even put your shop logo or name on the packaging for advertisement purposes. You could also offer gift boxes for customers who want to buy sweets and confectionery as a present.
Signs
You will need signs that state your pricing, allergens, whether a product is vegetarian, vegan or gluten-free, and signs that advertise any discounts or special offers.
Other accessories
There are a number of other accessories you could purchase for your sweet shop business. These could include:
– Napkins
– Cardboard ice cream tubs
– Paper straws
– Plastic gloves
– Sweet dispensers
– Sanitising station.
Food labels
All food businesses in the UK must ensure their food is properly labelled and includes information about any of the 14 allergens.
Cleaning equipment
Cleaning equipment is essential in any business that sells food. A clean and tidy shop will also make your business more attractive to customers. Some equipment you will need to invest in include a sweeping brush, a mop, cleaning products, cloths and sponges.
Typical Pricing
A sweet shop business is usually a low investment enterprise. However, it is important not to underestimate the potential costs associated with your sweet shop business, including your setting up costs, ongoing expenses and any running or overhead costs. By considering these factors, you will be able to create a budget and estimate your profits.
Below is a list of the typical pricing you can expect when setting up and running a sweet shop business:
Shop rental
Shop rental is likely to be your biggest expenditure. The cost of renting the shop, building or unit to run your sweet shop business from can vary significantly depending on several factors, including the size and location of your shop. If you rent a larger space in the centre of a big city, such as London, Manchester or Edinburgh, you are likely to pay significantly more in rent compared to a sweet shop located in a smaller town. Rental costs are often calculated per square metre and can range significantly, from £500 to £15,000 per square metre annually. The average sweet shop is between 1,000 and 1,500 square metres in size.
Equipment costs
The equipment costs associated with setting up a sweet shop business are usually lower than many other businesses, as large, expensive equipment is not usually required. Depending on the type of equipment you require, you may need to spend as little as £1,000 on equipment. Keep in mind that some of your equipment costs, such as serving containers and cleaning products, will be ongoing costs that you need to fund regularly.
Repairing and replacing equipment
This is an ongoing cost you will need to factor into your budget. You may need to maintain or repair equipment periodically and if your equipment is no longer functional, you will need to pay to replace it.
Stock
To maximise profits, the cost of your stock should be no more than 40% of your sale prices. Different sweets and confectionery will cost different prices, so to calculate how much you will need to spend on stock, you first need to decide what types of sweets you are going to sell.
Running costs
Running costs are the costs associated with running your sweet shop business. Most of these costs will be paid monthly, although some will be paid yearly. Your running costs could include your overhead costs such as electricity, gas and water. If you keep the running costs as low as possible, this can help to maximise your profits.
Insurance for your business
There are several types of insurance you may require, including Stock and Contents Insurance, Employers’ Liability, Public Liability, Product Liability, Business Insurance, and Legal Indemnity Insurance. The cost of your insurance will vary depending on your coverage level and insurance provider. You can expect to pay between £100 and £500 for insurance.
Advertising costs
Advertising is a great way to grow your sweet shop business and is particularly important when you are first setting up your business. The recommendation is that you spend no more than 10% of your annual revenue on advertising costs. For example, if your annual revenue is £60,000, your maximum advertising costs should be £6,000. Once your sweet shop business is established, you may be able to reduce your advertising costs.
Licensing costs
There are several licences you will need to apply for. You will likely need to pay between £50 and £500 per year for your various licences.
Safely Running a Sweet Shop Business
As both a food and retail business, it is imperative to ensure you safely run your sweet shop. Failure to safely run your business could result in an accident, illness or injury to a customer, an employee or yourself.
As both a food and retail business, it is imperative to ensure you safely run your sweet shop. Failure to safely run your business could result in an accident, illness or injury to a customer, an employee or yourself.
Some safety protocols you should ensure you adhere to include:
Implement cleaning procedures
Having effective cleaning procedures is essential to any food or retail business. You should implement a cleaning schedule and cleaning policies, such as ensuring the personal hygiene of you and your employees and providing handwashing stations for staff and customers. You should also ensure any equipment, surfaces and the shop itself are cleaned regularly.
Implement emergency procedures
If your sweet shop is located in a shopping centre, ensure you are aware of emergency procedures, how to proceed in the event of an evacuation, and any assembly points. If you are a stand-alone shop or are located on a high street, you may need to implement these procedures yourself. Ensure emergency procedures are displayed in your shop so that employees and customers can access them.
Ensure you have a fully stocked first aid kit
You should have a fully stocked first aid kit available in your shop in the event of an accident or injury of an employee or customer.
Keep clear, up-to-date records
If you receive a visit from the Environmental Health Office (EHO), they may want to see up-to-date records of cleaning schedules, risk assessments, health and safety policies, allergens and temperature checks. Keeping these records not only helps to protect your business but also ensures procedures are followed at all times.
Obtain a food hygiene certificate
Although this may not always be a legal requirement in a sweet shop, it is recommended that any business that handles food ensures all staff are appropriately trained in food hygiene.
Conduct risk assessments
Although risk assessments are only legally required for businesses with more than five employees, if you have less than five employees, it is still recommended to complete risk assessments. Risk assessments can help you to identify any potential hazards and help you to ensure any actions required to reduce or eliminate these risks are completed. This can help to protect the health and safety of you, your customers and your employees.
Safe storage of stock
Although most sweet shops don’t sell perishable foods, it is still imperative that you ensure your stock is stored safely. Ensure that food storage areas are temperature-controlled, and that food is appropriately covered to protect it from contamination from dust, dirt, insects and pests. You should also follow the First-In/First-Out (FIFO) method to ensure you use older stock before newer stock.
Ensure the security of your stock
Theft can be a major problem for shop owners. Ensuring your stock is safely stored and your shop is secure can help to protect your business. Installing a CCTV system, a reliable lock and an alarm system are just some ways you can protect your sweet shop.
Legal Requirements
There are several legal requirements that you should ensure you adhere to when setting up and running your sweet shop business:
Register your business
You need to legally register your sweet shop business before you begin trading. You must set up as a sole trader, a limited company, or a partnership. You can register your business at gov.uk.
Register as self-employed with HMRC
Running your sweet shop business as an individual or as a self-employed person requires you to register with HMRC. You will need to register your business name and keep records of all your income, profits and expenses.
Ensure correct labelling
You must ensure all of your food products are correctly labelled with information regarding the 14 allergens. Allergen information must be visible and easily accessible for customers. Sweet shops must also ensure that sweets that have a legal name or brand are labelled accordingly. Regardless of whether the sweets are sold pre-packaged or loose, the legal name and ingredients must be advertised.
Comply with employment legislation
If you employ any part-time or full-time staff in your sweet shop, you must follow employment legislation. You must ensure you comply with legislation on recruitment, working hours, pay, sickness, discrimination, dismissals, and maternity or paternity pay.
Obtain insurance
As mentioned earlier, there are several insurance requirements you must ensure you adhere to. Consult the list above and ensure you have the appropriate insurance for your sweet shop business.
Apply for a Notification to Process Personal Data Licence
You can apply for this licence with the Information Commissioner’s Office (ICO). If your sweet shop has a CCTV system or processes personal information such as payroll information or accounts and records you will need to apply for a licence with the ICO and renew your registration every year.
Apply for any other relevant licences
Some other licences you may require include a licence to play background music from the PPL PRS. You may also need to request planning permission if you need to make any changes to the shop. You will need to request planning permission from your local council.
Positives of Owning a Sweet Shop Business
There are some great positives to owning a sweet shop business:
A high markup on products
Sweet shops usually achieve at least a 50% markup on price. As you do not need to produce the products yourself, you can achieve an easy profit on the products you sell. This can result in great profit margins for your business.
You can be part of the local community
A sweet shop is a staple of the British high street and evokes feelings of nostalgia for many people. Owning a sweet shop is a great way of becoming an important part of your local community and getting to know the local residents.
Lots of face-to-face interaction
If you love interacting with people and working directly with customers, a sweet shop is a great business to own. You can be hands-on with your customers every day and work directly with any employees.
Great fun
Working in a sweet shop can be great fun. You will likely get a lot of children and young customers, whose excitement and enthusiasm can be infectious. The work is also usually much less stressful and more enjoyable than other retail or food businesses.
A simple business model
Only a simple business model is required when opening a sweet shop. This can make it quicker and easier to launch the business and build it into a success.
Seasonal opportunities
Holidays and celebrations such as Christmas, Valentine’s Day, Halloween and Easter can result in a huge increase in business. Sweets and confectionery are common gifts to buy at these times of the year and by maximising on these opportunities, for example, by decorating your shop, selling specific products such as Christmas confectionery, and offering special deals, you can significantly increase your profits.
High demand
There are fewer sweet shops than in the past, but sweets remain just as popular, meaning your business is likely to be in high demand. You could even tap into specific markets, by offering alternative products, such as vegetarian, vegan and gluten-free sweets.
Negatives of Owning a Sweet Shop Business
However, there are some important negative aspects of owning a sweet shop business that you should be aware of:
High stress and time-consuming
Setting up and running your own business can be stressful, as the majority of the responsibility will fall on you. It can also be time-consuming as you will be responsible for a large number of tasks, such as sourcing, ordering and replenishing stock, calculating outgoings and profits, store maintenance, advertising, marketing and selling products.
High employee turnover
A sweet shop doesn’t offer much opportunity for professional growth. There are also few opportunities for professional creativity. This can result in high employee turnover and a lack of employee commitment to the business.
Can be competitive
Not only are you competing with other sweet shops, but you are also competing with other establishments that sell sweets, such as supermarkets, corner shops, department stores, ice cream vans, and even the internet. This can make it more difficult for you to make enough sales to earn a profit.
Business can be inconsistent
Profits can be very up and down on particular days of the week; for example, you may earn significantly less money during the week compared to the weekend. You are also likely to experience times of the year that are much less busy than others. This can make it difficult to predict your profits and order the correct amount of stock.
Initial profits may be low
Before your business is fully established or has grown in popularity due to advertising or word of mouth, you may experience slow business initially and it may take a while before you begin to turn a profit. This means you will need to wait a while before you receive a return on your investment. You will likely need to have additional money to support yourself and the business in the meantime.
Lost profits from out-of-date stockÂ
Although many sweets are shelf-stable, meaning they have a longer shelf life and can be stored at room temperature, they still usually only have a shelf life of 6–12 months. This means you could lose stock and the money you have invested in the stock as a result of the sweets going past their best before date.
Planning Your Sweet Shop Business
An effective and well-designed business plan is imperative to the success of your sweet shop business.
There are some key considerations you should make when planning your business and creating your business plan:
Who is your target customer base?
Deciding your target customer base can help you to plan your business more effectively. It can help you decide on your business’s brand, whether your shop will have a theme or design, and the types of sweets and confectionery you are going to sell.
What products are you going to sell?
Are you going to focus on one particular type of product, or will you sell a wide range of sweets? You should also decide whether you are going to sell any other food products, such as savoury snacks, ice cream or baked goods. You may even choose to focus on an untapped niche, for example, by opening a vegan sweet shop, a halal sweet shop, or a gluten-free sweet shop.
Where will your sweet shop be located?
The location of your shop will have a huge impact on the amount of rent you have to pay. However, if your shop is located in an area with high footfall or in a location popular with your target market, the increased sales and higher profits can make the extra expenditure worth it.
Will your equipment be rented or purchased?
It may be possible to rent some or all of your equipment to reduce your initial outgoings. You could also consider renting a shop or unit that already has some of the furniture or equipment your sweet shop business will require. However, buying your equipment could save you money in the long term. Calculate the costs of renting vs. buying and then consider your finances and your business aims to help you make the best decision for your business.
Can you finance the business yourself or do you require outside investment?
Calculate your start-up costs and approximate how long it will take you to begin turning a profit. You should also factor in your running costs and overhead costs. You can then determine whether you can finance your sweet shop business yourself or whether you need to source investments from an outside source.
Will you hire any employees?
Depending on the size of your sweet shop, the opening hours, and how busy your shop is, you may need to hire some employees. Calculate the costs associated with hiring employees and whether this is the correct move for your business.
What are your business objectives?
Determining your business objectives can be a great way to attract investments for your sweet shop business. Your business objectives are also a pivotal aspect of your business plan. Using your business objectives, you should create a one-year, three-year, and five-year business plan to help you grow your sweet shop business and ensure it succeeds.
Your business objectives should be SMART:
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- S = Specific
- M = Measurable
- A = Achievable
- R = Realistic
- T = Time-bound
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Who are your competitors?
Understanding who your competitors are, the types of products they sell and their price points is essential to the success of your sweet shop business.
Check you have complied with all legal requirements.
Ensure you have filed all your paperwork and are complying with all legal requirements before setting up your sweet shop business. Failure to comply with the legal requirements could result in delays in setting up the business, forced closure of the sweet shop, or the incurrence of a fine.
