Derek Balding has run Mace Stores with his wife and business partner Loo since 2003. The seaside town of Mundesley has a good beech and a caravan park nearby, and the summer is boom-time.

It’s the winter months that are more of a challenge, although Derek and Loo have worked hard to build their reputation and their turnover is much more even across the year now than at first.

Derek is a great believer that people shop with their eyes, and the first thing customers see is his special offers.

Derek Balding

Mace Stores

Location: Mundesley, Norfolk

Hours: 7am-8pm Mon to Sat, 7.30am-8pm Sun

Staff: Four

Size: 1,000sq ft

Trading started: January 2003

Style: A convenience store in a seaside town with 1,500 residents. Nearby competitors include Tesco Express (since February 2013), Spar and a post office. There is a housing estate nearby but business is largely seasonal and passing trade is limited.

“It’s about catching people’s eyes,” he says.

“Hence the gondola ends as soon as you come in. People see Pot Noodles for 75p and think ‘That’s cheap’.”

There are treasures in store for shoppers that look, including pastries and pies from Sheringham, 12 miles away – “£1.10 for a ruddy great sausage roll,” says Derek.

Since Tesco wormed its way into town last year, the independent shops have had to work harder but Derek is gradually convincing shoppers he has a great value offer and is actually cheaper than the multiple on some lines.

But you can’t blame Tesco for everything, he says. One of his biggest challenges now is educating customers about his total basket range.

“People just don’t seem to have the extra spending money at the moment – they will buy the things on offer, but not the other things.”

Since Costcutter took over the Mace symbol last year the margins have improved on their promotions. With the ‘Buyco’ (Palmer & Harvey and Costcutter’s combined buying group) up and running, Derek expects those margins to improve further still.

But you can’t live solely off of 16% margins, so Derek is finding ways to get people thinking beyond the special offers.

Alcohol is a big category for them, so in December he and Loo held a wine-tasting evening. They drummed up trade by renting a stall at the Mundesley winter fair for a modest outlay of £10.

“We asked our Costcutter rep if he could do anything for us and we ended up with half a dozen bottles of Wolf Blass that we opened up, and we also had some nice cheese,” says Derek.

Of the dozen customers that attended, several have come back as repeat shoppers. Knowing word of mouth is priceless, they are planning to hold another and aiming to create a bigger buzz than ever.

Derek’s top tips:

1)      Always be aware of your competitors’ prices, and think what will appeal to your customers. At Christmas Derek offered a bottle of Echo Falls at £3.99. “People came in asking me if I was aware Iceland was selling it for £5.50,” he says.

2)      Use price-marked packs (PMPs) with care. If Derek changes a product to PMP, sales double. But he makes sure his offers draw shoppers to items that are not discounted.

3)      Help suppliers to help you. Derek has had great support from his Mars rep in the last year and in return he is trying out the Mars planogram on his confectionery display. “It’s about who is going to help me develop my business – then they get my help,” he says.

Hampers for special occasions have been another success. Wicker baskets (bought for 50p) were stocked with items from the store and sold for £10. Bigger hampers sold for £50. They do themed ones for special occasions and even one for pets (including doggy treats and toys). It proves there are big sales opportunities and that converting them into cash can come down to how you package your products.

“If there’s one thing I’ve learned it’s that you shouldn’t be afraid to have a go,” Derek says.

“Whether that’s trying a new product or other things, you can never stand still – you have to keep evolving.”