Welcome to the November- December Wholesale Manager. After Tesco-Booker set the ball rolling, 2017 has been a tough year for food and grocery wholesaling, with major food retailers investing in wholesale and blurring the lines between the two. Morrisons partnered with McColls to revive the Safeway brand and Nisa bought time with the Co-op takeover. Now it’s CMA-approved, the Tesco- Booker deal will change everything, driving down margins and forcing symbol groups to fight to avoid the big four pushing them out with their newfound convenience and wholesale capabilities.
But the biggest shock has been delivered wholesaler Palmer and Harvey going into administration, after rescue talks with private equity firm Carlyle failed to reach a positive outcome. Administrators PwC said 2,500 jobs would be lost with immediate effect. Troubled P&H had been struggling for months with debts and owed large sums to key suppliers, including JTI.
In more positive news from wholesalers, Brakes is riding the quality trail with its groundbreaking promise to bring in a market-leading range of top quality ‘free from’ products, to satisfy the burgeoning gluten-free, meat and dairy free, and vegan friendly sectors. Bidfood Scotland is playing the patriotic card, launching a range of Scottish egg and dairy products into UK foodservice, showcasing Scottish producers. And northern England SPAR wholesaler James Hall is making Christmas easier for busy retailers with its first online catalogue.
The new order puts pressure on wholesalers and retailers, but either way the power brands still look set to enjoy strong sales. In our Snacking Spotlight feature Matt Goddard, Wholesale Trading Director at Pepsico says the top 20 crisp lines in an average cash and carry depot account for over 24% of value sales and the bottom 200 contribute less than 0.5%, so staying focused pays dividends. Matt quotes a case study from wholesaler Hancocks’ flagship Loughborough store, where a 30% range reduction increased sales 11% and cut waste by a staggering 48%.
Similarly, consumers’ tastes haven’t changed that much when it comes to ethnic food and drink, as our feature on this category bears out. Courtesy of Wing Yip, the UK’s leading Oriental food grocer, we can report that Chinese is still Britain’s favourite Oriental food. Despite changing palates and the diverse cuisines now available, a whopping 94% of British adults have eaten Chinese food in their lifetime and around 4 in 10 have an Oriental take away of some sort once a month, be it Chinese, Thai, Japanese or Indonesian.
Our last Quote Unquote of the year features Paul Hargreaves, Chief Exec of Cotswold Fayre, which started as a “spare bedroom business” in South-East London in 1999 and is now wholesaler of choice for exciting new brands which are unavailable in supermarkets. See you in the New Year.