Food and drink wholesaler JW Filshill, one of Scotland’s oldest independent food and drink wholesalers, saw turnover increase to £203 million – up 2% from £199 million – in the year ending January 31, 2023.
Glasgow-based Filshill, a fifth-generation business that supplies the KeyStore convenience stores and independent retailers across Scotland and the north of England and national accounts including the Scottish Prison Service, also saw operating profits rise from £2.7 million to £2.9 million.
Filshill, which relocated from Hillington to new purpose-built premises at Westway Park near Glasgow Airport in March, recorded gross profit of £19.4 million, up from £17 million, while net assets increased to £18.9 million compared to £17.1 million the previous year.
Simon Hannah, Filshill’s chief executive officer, tells Wholesale Manager what benefits the company’s new distribution centre will bring to the business and how wholesalers will respond to the cost-of-living crisis.
What does your role as CEO of JW Filshill involve?
We have very clear accountabilities across the business as part of our 10-year Strategy where every aspect of functionality is appointed to an individual or a department, my headline accountabilities are Culture, Vision, Strategy, Innovation and Diversification.
In the past 24 months much of my time has been working closely with our “transition team” in decision making around expenditure and efficiency process within our new purpose-built distribution centre which has been fun. Our weekly 60 min management meetings keep me up to speed with all areas of the business, what’s going well, what friction points we are experiencing and what issues exist that require immediate attention and more importantly which colleagues across the business are going above and beyond. There is always high energy around these meetings.
I actively chair our Works Council as well as having responsibility for supporting our Mental Health, Environmental Sustainability and DEI teams.
Given the accountability structure we have it allows me time to travel to international markets to meet with retailers across all sectors to see how they are innovating, using technology, data, Machine learning and AI. With that level of learning I can bring innovative ideas back to the business in order to keep our business and our customers’ businesses at the front end of retail innovation.
What are your goals for what you want to achieve in the role?
As a 5th generation “business for families”, my primary goals are to ensure long term stability for all our colleagues, grow the business to create new jobs within our community and of course get the business in good shape for the 6th generation.
In terms of financial metrics, our collective goal within our 10 year Strategy (by 1st February 2031) is to be a £350m turnover business, generating 2% net profit with 500 KeyStore customers.
Filshill has moved to a purpose-built distribution centre at Westway Park. What benefits will this bring to the business?
For us to be able to realise our 10-year vision we had to create an infrastructure that gives us a fighting chance of achieving that. Efficiency is at the heart of increasing our margin aspirations. Westway is a state-of-the-art distribution centre that has efficiency at the core of its design which was created by the teams who work in all the operational departments. We have 3 picking environments which cater for the range of products we sell based on their rate of sale.
Our capacity in Hillington was circa 900k cases per month, our new facility has the optimum capacity of 2 million cases per month.
Sustainability is also a key element, we have 400 sq/m of solar panels on the roof, utilise natural light and have a genuine focus on getting to net zero. We have recently committed to purchasing 2 18t fully electric vehicles as part of that commitment.
What is driving the growth?
Our growth has been achieved due to our focus on data analytics, category management and helping our customers optimise their revenue and margin as well as recruiting high quality disciplined entrepreneurial retailers who are focused on growing within their local communities.
How is the KeyStore symbol group performing?
In terms of store numbers, we are now over 220 KeyStores and with demand still very high to join our symbol group we are delighted with the numbers & quality of the retailers that we are attracting. Our turnover has increased by over 6% year on year this year which is well ahead of the convenience market data, published by Kantar which shows symbols and independents around 1.5% growth this year. The main driver of this improvement and growth has been implementation of our store specific planograms based on shopper data gathered from our EPOS system, being used in over 50% of our estate.
Are there plans to increase the numbers of KeyStore retailers?
As stated previously we have an ambitious growth target set for 2031 and recognise that to deliver this we must rapidly increase both the number of retailers and the quality that we are bringing in. We recently appointed an additional head to our Business Development Team, Kieran Dhinsa, who has been with the business in several roles for the last 8 years and previously worked in retail convenience stores with his family. He knows the market inside out and has the drive and experience to understand and support the development of our target retailer, who is tech savvy, entrepreneurial, with the community at the heart of their business.
We believe that this appointment alongside our well established BDM team and our retail driven collaborative strategy will create even greater demand for retailers who fit our target persona to select Keystore as their chosen symbol partner. Our service levels and availability are vastly improving due to an increased and innovative forecasting system that focuses on a collaborative project with our commercial and operations teams internally and our test suppliers. This work will set us apart from some of our competitors in terms of service to our customers. Our new distribution centre was built with customers in mind and all of our customers are benefitting from this significant investment.
What are the benefits to being a KeyStore retailer?
We have created an environment for our retailers to thrive through a co-prosperity strategy, we understand that to be successful we need our retailers to maximise their profitability and drive community and consumer engagement, our Sales team don’t sell like a traditional wholesaler, they are focused on developing the retail environment for our customers and Keystore consumers alike. We are at the forefront of innovation and always looking to improve everyone in the supply chain’s experience efficiently. Our three Unique’s are our excellent customer service, including our tailored delivery service, continually looking to improve through data and technology innovation and our unrivalled supplier relationships, all of which our Keystore retailers can benefit from and look to improve their business with greater force than being part of another symbol group.
How has the wholesale industry changed in recent years?
Wholesale has always been a fast and dynamic sector and given the high turnover low margin models that the sector operates within we have always been very focused on efficiency, we have all become accustomed to consistent high availability service and availability from our suppliers (pre Covid).
Covid pandemic and issues in Ukraine changed the lens on that significantly. Inbound availability is still below 2019 pre pandemic levels as suppliers continue to seek new supply chain solutions. This is taking longer than hoped in some categories which is frustrating as lots of growth is being left on the table. The whole channel should be looking towards utilising technology in terms of improved and accurate forecasting to help our suppliers help us.
In terms of Brexit impact, people are a key area of change where availability of skilled resource has been impacted. Like all sectors of Industry, wholesale have had to really focus hard on retention and recruitment strategies. Focusing on areas like Mental Health and colleague wellbeing have been important, adapting to more flexible working needs. I am proud of the very proactive steps that Filshill have taken in this space, we have 30 fully trained mental health first aiders (including myself) who have made over 210 support interventions with staff, their families and even a number of suppliers and customers.
I have always had empathy in my leadership locker but empathetic leadership has never been more important.
How will wholesalers cope with and respond to the cost-of-living crisis?
By nature, wholesale is in place to supply shopper demand and our ability to respond to the ever-changing shopper needs is evident. When discretional spend is challenged it is important that we have the right offering available throughout retail customers stores to align to all different shopper demographics. Shoppers statistically are spending less but more often. It is also worth noting that we also need to provide range solutions for shoppers who are not eating out as much in casual dining environments where entertaining at home is on the increase. Ensuring that we have appropriate premium snacking, wine and spirits offerings is also an opportunity that should not be overlooked.
How digital is Filshill as a business, and do you offer any IT support for your members e.g. ordering apps, online support, delivery tracking?
Filshill are very focused on technology and are well placed in the digitised world, we have numerous systems for both internal and external benefit. 95% of all of our orders are captured electronically via E-Pos links, Web and mobile apps which drives accuracy and efficiency to our customers as well as creating time for our sales team to work closely with customers on added value tasks.
Our vehicle routing is automated, our picking systems use voice recognition systems and warehouse management systems measure productivity and pick face optimisation. We use power BI and business intelligence dashboards across the business every minute of every day and are capturing all of our internal operational data and external sales data into a consolidated data warehouse. All of this enables our business to make decisions based on data and in the future will take advantage of machine learning and AI to further keep our business relevant and help our customers optimise their revenue, margin and footfall.
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