At almost 90 years old, it might sound more like an antique shop than a convenience store, but the village shop in Ceres, near Cupar in Fife, is full of life as its bubbly staff chat away to customers.

John Mitchell is the fourth generation of his family to run the business. He also owns another store in Leuchars, near St Andrews, where he employs a full-time manager to take on day-to-day operations.

At first glance, the Ceres store seems to be ticking over nicely, but being an old established store brings its share of challenges as well as benefits. One of these is staffing. John's wealth of long-serving and hugely experienced staff is beginning to dwindle as the older employees reach retirement age or decide to cut down their hours.

John explains: "We have 35 employees between the two stores and I'm at the stage now where I'm slowly having to replace the vast majority of long-serving staff - those who worked here with my dad.

"We've got three people who've worked more than 30 years for the business, which is quite exceptional in this line of work."

Until recently, John also had his sister's help in the store, but the lure of sunnier climes put paid to that. As John says: "My sister worked for me for seven years and prior to that she'd been with the business for 13 years. But she's just moved to Tenerife so I've had to fill her position. And it might only be a couple of years before the manager at Leuchars retires. How do you replace someone who has managed the store for 30 years with zero input from me?"

Over the years the store has had to change the way it recruits its staff. John says that in the past, it would have been a case of approaching people and asking if they'd like to work at the store, but now it's not quite that easy. "We advertise in store, put ads on a notice board outside and in the local paper," says John. "Unfortunately, we get quite a lot of time wasters who apply for jobs because they need to be seen to be applying (in order to claim jobseekers' allowance)."

Even with the stresses of staffing the Spar store John is glad to be running his own business, especially having had a taste of life outside the family business. His father, Sandy, who owned the store previously, retired two years ago after working for 44 years in the grocery industry. He didn't want John to feel pressurised into taking over and encouraged him to try different things before he made a decision on whether to run the shop.

Says John: "I did an honours degree at Edinburgh University in business studies and I worked for Hewlett-Packard for seven years. I had 36 people working under me and was travelling the world to places such as America, France and Germany."

He adds: "It was a good job, but the fact of the matter is, when you're working for yourself, the harder you work, the more you get back. I've been here for the past seven years and have never looked back."

And just because he didn't work his way up from the shop floor doesn't mean he's afraid to get stuck in. "I don't just sit in the office - I wrap bread, I put frozen food away - a bit of everything," says John.

"Staff see what you're doing and they know that you're hands-on so they respect that."

Competition is rife

The Ceres shop became a Spar member in 1990 and is the only store in the locality. "We have a large surrounding area - a lot of nearby villages use us - but Ceres itself only has about 1,200 people, so it's not a big village," says John.

However, competition is still tough. "A Tesco opened about eight years ago in Cupar, which is two miles away," he explains. "There was a 20% drop off our bottom line in the first week. But we kept working hard and after a year, people began to dislike going there because of out of stocks and lack of communication. We're now right back on track with where we should be."

But it wasn't just the competent running of the store that won back customers - it was the added convenience of Ceres' car park. "Cupar is a disaster area for driving, whereas customers who come here can use the car park at the back of the store. I spent £15,000 adding four extra spaces last year and I've now got 24 off-street parking spaces," says John. "That's a real positive for this store and I encourage all the locals who we've got a good rapport with to park their cars here as it gives them a bit of security, and it also allows passing trade to stop and pop in. You lose a lot of business if there's no parking. If people drive to the store, then they can fill their baskets and buy heavy items, such as 12-packs of beer."

Another factor that gives the Ceres store a point of difference is its generous grocery offering. "We've got a lot of older customers here and they are keen to stock up on groceries," says John. "Most Spars are cutting back on grocery lines to make more space for convenience categories such as chilled, but I'm trying to maintain a good share of grocery. It's getting difficult because CJ Lang is cutting a lot of its grocery products. It's looking at what people are buying and realises that it's not shifting as much grocery as it used to."

Although John is keen to hang on to his grocery range, he is well aware that chilled is a growth category. "I spent £17,000 on a new chiller two years ago, which runs along the back of the shop and I've put in two new juice chillers and a new sandwich fridge," he says.

And Ceres has also cashed in on the popularity of provenance. The shop's counters are stacked with local strawberries during the summer months in a bid to encourage those last-minute impulse buys.

In fact, the only big trend that the store isn't exploring is food to go. "Because of where the store is based, we're not on people's way to and from work, so it wouldn't be worthwhile spending a lot of money putting in a food-to-go area for not a lot of payback," says John.

"Also, we've got a butcher next door who sells hot pies, so there would be tough competition. It would be foolish of me to tread on his toes as the customers he brings in come here as well."

John isn't shunning food to go completely, though. "I'm looking at investing in a really fancy coffee machine," he says. "This is going to be top-of-the-range stuff. With 10 cups a day it pays you back and you can make £3,000 profit a year."

Delivering a good deal

Another sure-fire money maker is offering a good set of deals. "A big part of our business now is promotional activity," says John.

"One thing that I've changed significantly from my dad is that I'm prepared to buy in bulk and store it, whereas he wasn't. He was of the opinion that if it's sold, it's sold and we'll move on to something else.

"I'm of the opinion that if I can buy 200 cases of Tennent's lager at £3 a case cheaper than the standard price, then I'll do it. We're making a bit  of extra money and we're also able to pass on better offers to our customers."

Mind you, taking risks doesn't always pay off. "One of our biggest disappointments was last Christmas," says John.

"We bought in a lot of booze, but sales were shocking and we were really hit hard. I think it was largely because the multiples were offering ridiculous deals on cases. We saw a 25% sales decline year on year for that period."

But even when things don't go as planned, John always has a plan B. "We had a lot of stock that year, but it wasn't dead stock as we were able to sell it after Christmas," he says.

Owning a second store, with a completely different customer base has also been a key advantage. "We're able to move stock between stores," says John.

Fact File
Store: Spar, 2-6 Main Street, Ceres, Fife, Scotland

Established: 1919 (joined Spar in 1990)

Turnover: £24,000 a week

Size: 2,000sq ft
"Leuchars sells a lot more alcohol than we do because it's a younger village. There's not really ever a serious risk with what I buy because there is always the other shop."

So when the time comes, will John be able to hand over the store to the fifth generation of Mitchells?

"I have two sons - a toddler and a six-month-old - so they're both too young to work the tills yet, although the older one has already worked out where the toy stand is!" he laughs.

But John wants to ensure that his sons have the same opportunities that he had before making a decision about the family business.

"I'd do what my dad did - I'd never force them to join the business," says John. "I'd sooner they went to university first and then decided whether to work in the store. But if they want to come here afterwards, then they're welcome!"