Parfetts – From strength to strength

West Midlands Mayor Andy Street opened the new state-of-the-art Parfetts wholesale cash & carry depot in Birmingham on 22 March.

Parfetts is an employee-owned company, and the Birmingham site is its eighth cash and carry depot. The operation will create over 100 new jobs and help thousands of retailers across the Midlands access great value offers and expertise through the company’s extensive network of development advisers.

Commenting on the launch, Andy Street, Mayor of the West Midlands, said: “Given my time at John Lewis, I’ve always had an affinity for employee-owned businesses. That’s why it’s wonderful to welcome Parfetts to our region, and I very much look forward to seeing them go from strength to strength in the months and years ahead – helping our retail sector to advance.”

Parfetts operates depots in Aintree, Anfield, Birmingham, Halifax, Middlesbrough, Sheffield, Sommercoates and Stockport. Its operations cover Northumberland to Wales, the Midlands and Northamptonshire.

The company supports over 1,100 retailers through its Go Local and The Local fascia group and operates a retail club with over 5,000 members.

Parfetts revenue reached a record £570m last year, and the new Birmingham depot is an important part of its growth plans. In addition to traditional retail lines and a strong on-trade proposition, the business carries over 1000 foodservice-specific products complemented by the availability of non-foodservice specific lines. This includes licensed products, bare necessities, non-foods and catering disposables.

Commenting on the launch, Guy Swindell, joint managing director of Parfetts, said: “Our team has worked hard to launch the new Birmingham depot in a short period of time. It was great to have their hard work recognised by the Mayor. We can’t wait to bring the benefits of our employee-owned model to independent retailers across the region.”

Parfetts was established as a family business in 1980, a majority was sold to an Employee Trust Board in 2008, and the company became fully employee-owned in October 2018. A desire to build a sustainable company based on sound governance and engaged employees were at the heart of the decision to move to employee ownership.

Andy Whitworth, Parfetts Operations Director, spoke to Wholesale Manager at the opening.

Why was Birmingham chosen for the new Parfetts depot?

It’s an area where we know there is a lot of retailers. Our name is known within the area. We do deliveries from another depot into Birmingham. It’s part of our national expansion, Birmingham was the next natural area for us to move into. We started looking about a year ago and this site came up. It ticked all our boxes.

What size is the depot?

100,000 square feet. It is in line with our bigger depots. We have got an estate that varies from 50,000 sq ft to 120,000 sq ft. So Birmingham is near the top end of our size range.

What product ranges will Birmingham be offering?

It offers a full convenience range. We have scaled the range back from some of our other big depots where traditionally we have carried a lot of product, between 12,000 and 13,000 SKUs. In the Birmingham depot we are concentrating on 7,000 SKUs for now. We believe that will satisfy the needs of all the independent retailers. With the facility the way it is we believe we can go big on display, big on availability and make it a much more pleasant shopping experience for the retailers.

Will there be any specialities in the ranges that Birmingham will focus on?

No, we offer full convenience, anything an independent retailer would be wanting to stock, we will stock. We have a range of ethnic foods in Birmingham that we don’t have in other branches. We have gone big on chilled and frozen, we have invested heavily in chilled and frozen. We have got a much wider range, concentrating on local suppliers that are relevant to this area. We have gained that through the experience of the general manager who has worked in the area for 30 years so he knows the customers, he knows what they want so we have put that investment into the chilled and frozen department.

Will chilled and frozen be a big category for wholesale in general over the next couple of years?

I think fresh and food-to-go is the current trend. In our symbol stores we encourage a much wider range of fresh and food-to-go options. We need to reflect that within the cash & carry. We believe that if we are asking a retailer to provide the best in class in chilled and food-to-go then we need to do the same in the depot so that is what we have done. The range reflects what the local market says we should be stocking.

What different kinds of ethnic food are you offering?

We have got a core range, we have kept it simple for now, we have gone for the best sellers. We have relied on supplier advice and market data and what sells well. We will then look and build on that as the customer base grows. We have done enough to provide a good offering, hopefully we have covered all the areas we need to cover. If we haven’t, we will soon pick up on that and our trading team will be all over that and we will have the stock in.

How big is the catchment area for this depot?

We are looking at the south of Birmingham, Coventry, the east and down to the south-west. That is our immediate focus. We need to get the customers used to coming into us as a business. They need to understand what we do. That doesn’t mean we are not actively recruiting customers from all round Birmingham and further down the line. I think we have got an opportunity to expand the delivered service into other areas. From Birmingham, there are areas down the M5 towards Cheltenham and Gloucester, Redditch, Worcester, Warwick, there are lots of places we can get to. We have got some customers in Stoke that are serviced from another depot. We could tie those up and start to join the areas up where we are currently delivering to. This is our southernmost depot and our head office is in Stockport.

Is this part of a plan to open depots all over the country?

No. Birmingham is the UK’s second city, with a massive population and lots of convenience stores. The opportunity was here. We saw that opportunity, we felt we could make a splash in the marketplace, we felt we could make a difference through the offering. That’s why we chose Birmingham. The next one, if there is another one, could be anywhere. It all depends what suits the needs of the business at that time.

How many staff have you recruited for Birmingham?

70. The majority are full time. Because the depot has been in development for a number of months, we have managed to recruit a really good team here. The management team are all strong, they have all got cash & carry experience. We have trained them at our other depots, they have been all round our estate, they understand what we do as a business. They are experienced in what Parfetts do so they are going to hit the ground running. They are used to what the customer expects from them.

Parfetts is known for being employee owned. Are the new staff part of the ownership scheme?

Yes. We are employee owned and that is to the benefit of the employees. There is no buy in from any employee. They benefit from being an employee of Parfetts. Our duty as a board is to ensure that we provide stability for their career and that we hit our sales and profit targets and then the staff get rewarded from that. The more they put in, the more they take out. An added advantage is that because we don’t have shareholders or a family that we need to report in to, then some of the profit we make we can reinvest. We can keep prices cheap. It helps us to develop local brands and it helps us to expand in stock as well. We keep our margins low by doing what we do and through the employee owned model we can sometimes invest a little bit more into things that other people are not able to.

Will the cost of living crisis be a challenge for your business this year?

It’s going to be a challenge for every business. We are looking at efficiencies, like any other business. We are not looking at reducing staff numbers. We are doing it through a programme of delivery optimisation. We have invested £100,000 in software for deliveries and now we can route all our vehicles. We deliver from all our sites but we have a lot of crossover of deliveries. Vehicles from Liverpool go to Manchester and vehicles from Manchester go to Liverpool. So we can now do the shortest mileage, we can keep the cost down. We can also increase the delivery headspace by making those vehicles more efficient and running two or three times a day. We have all got cost challenges but we need to look internally first. We are not going to pass that on to retailers. We are not going to put a delivery charge on, or surcharges. The price is the same for everybody. Internally we will figure out how we get there.

Do you have sales targets for Birmingham?

Yes, we have all got a private target. The best way to describe it is it will evolve. We have no hard and fast target. Our big focus is recruiting customers. If we recruit the right customers and we get people registered, then we believe that with the service, the range and the price we are offering, the sales will come naturally. We had registered 750 customers already by day one of opening. We have got big hopes to recruit more customers.

There is a Bestway next door. Why go to Parfetts rather than Bestway?

We invest in all sorts of different areas. We invest in the retailer. We have got three fascia options for retailers. We have got deep cut prices. We invest in stock so our availability has always been strong. We are a trading company. We invest in staff so we get the best service. We have got cash & carry customers, we can do click and collect, we have got a facility of direct load where if a customer has got a large order that is placed directly into the vehicle by a roller system so they don’t have to load and unload the trollies in the car park when it is wet. We have invested in a cafe so we have got catering facilities. The catering is run by a retailer who knows what retailers expect. We are trying to create a hub for retailers to come to. We invest in all the service points, we will have all the tills and the reception covered all the hours we are open. There is no scraping on staff so the customer gets the best experience, and that is something we pride ourselves on having. Our customer experience is one of the best.