© The Financial Times Ltd 2015 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
In 2010, a few years into running Scandinavian Kitchen, a Nordic-themed café and grocery in London’s Marylebone district, Jonas Aurell and Bronte Blomhoj-Aurell began considering a second location. But after some thought, they decided to invest instead in the shop’s website. Yes, the café’s fresh smorgasbord lunches were popular, but so were the tubs of beetroot salad and imported flatbreads they sold online or through a nascent mail-order business.
“We realised, ‘if we don’t do this properly, it’s going to end in tears’,” says Mr Aurell of the new distribution channels.
These days, teary endings are not unfamiliar to shops that cater to an expatriate crowd.
Whereas small-scale enterprises offering PG Tips tea to Britons, peanut butter to Americans or maple syrup to Canadians – to name just a few cravings of moneyed western expats – have long been fixtures in international capitals and beyond, globalisation and the internet threaten the business model. Why trudge across London if pickled herring is a click away on Amazon? Why pay independent-shop prices if Ryvita is stocked at your local grocery chain?
While some independent retailers would no doubt point to their quality and sense of community, for Mr Aurell these arguments were trumped by the principle: “If you can’t beat ’em, join ’em.”
So, in addition to improving his store’s website, he signed a contract with Ocado, the UK’s fastest-growing independent grocery delivery service. Scandinavian Kitchen now uses its relationship with food producers across Denmark, Finland, Norway, Iceland and Sweden to supply Ocado customers with Pyramid crispbread, Kronjast Farsk Jast fresh yeast and Frödinge Swedish mudcake mix – using the bigger company’s scale to increase market penetration and bring down prices.
Turnover from its website grew just over 50 per cent in 2012 and just under 50 per cent in 2013, while wholesale and distribution sales “have seen excellent, double-digit growth” for three years, says Mr Aurell.
Owners of other expat shops are finding different ways to survive. Jennifer Myers, whose father founded Myers of Keswick – “your traditional British grocery store in New York City” – in 1985, feels pressure from the internet. However, when she sees British products on sale in bigger stores, she feels pride rather than panic – at her father being ahead of his time. Moreover, growth at the bricks-and-mortar business is led by perishables such as sausages, pies and other products made on the premises – something the chains cannot copy.
Ms Myers also credits the royal wedding, diamond jubilee and London Olympics with helping to drive sales growth in recent years.
Rather than competition, the big headache has been the US Food and Drug Administration, which has, for example, cracked down on the sale of Maynards Wine Gums over colour additives it deems unsafe.
Amateur importers – that is, ordinary expats – are also facing bureaucratic checks on old habits, in the form of airline luggage surcharges and security and customs restrictions.
Have Ryanair luggage fees boosted business at the Nordic Bakery, which has three locations in London, all within a short walk of Scandinavian Kitchen? Miisa Mink, co-founder, doubts it – in this case because “being a destination for expats was a positioning we absolutely avoided”. Yes, the bakery’s rye bread draws Norwegian, Danish and Swedish regulars. But narrowing the focus to that crowd would have clashed with Ms Mink’s approach to life abroad, which eschews cloistered expat communities.
“We were very ambitious from the start,” she adds. “We knew that it would have been very difficult to open a second and third store if the first had been for that audience.”
Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.