Unitas Wholesale, the largest wholesale services company in the UK, with a buying power in excess of £8 billion, appointed Mark Aylwin as non-executive Chairman earlier this year.
With a vast amount of experience across the sector including wholesale, retail, foodservice and on trade, Aylwin brings a new perspective to the business having been in the food and drink industry for over 35 years. This experience has included spells at Safeway, Morrisons, Musgrave, Booker and Conviviality.
Mark Aylwin tells Wholesale Manager how he wants to put the group’s members at the heart of everything the business does.
Are there any particular aspects of the business you are keen to focus on?
Creating a member centric culture is top of our change agenda. Our members should be at the heart of everything we do and our supply base should be aligned to this.
Unitas has over 150 members across retail, on-trade, foodservice as well as specialist wholesalers, our members generate in excess of £8bn in sales, so we have unparalleled scale as a buying group. That scale can be of great benefit to members and suppliers, but only if we focus on doing what is right for our members and their respective customer base.
That means having the right products at the best price and working collaboratively with our supply base to ensure a quick return to acceptable service levels.
As part of this shift to member centricity, we will go back to our roots and ensure that the founding ethos of member-based buying groups is as relevant today as it was when these groups were first created.
With the Multiples’ continued growth in convenience and online, together with their more recent moves into wholesale, the need to combine our collective buying power to match that of the Multiples is greater today than ever before.
And it’s not just Retail; Sysco and Bidfood are highly acquisitive global powerhouses within foodservice, whilst the brewers continue to expand their wholesale footprint in the on-trade.
Despite the increased competition, I believe our members are more agile and closer to their customers than the big players and this is of tremendous benefit to suppliers who engage with us. Many of our members consistently outperform the bigger players in sales growth and customer satisfaction.
We need our suppliers to recognise this and come to us with innovative products and services. Our broad reach across all channels should be seen as the best method to get new product to market.
You have been in wholesaling for 35 years. How has the industry changed in that time?
It’s been an exciting ride, the growth of delivered wholesale, symbol stores, the Mults’ entry into convenience, the rise of the discounters and online retailers, as well as the transformation of out of home (with the UK developing some of the best bars and restaurants in the world), have all had a massive impact on our sector.
The next few years will be even more transformational – the accelerated switch to online (both in retail and OOH), the entry of disruptors to this space, the green agenda and changing consumer tastes will require us to be more agile than ever.
Our members are outstanding operators, who have demonstrated that by embracing change, whilst focusing on providing great value and delivering excellent customer service, they will continue to prosper.
One of the more pleasing things I have seen over the past few years, is suppliers becoming more engaged, in particular the quality of their people working in our channel is far better than it used to be. Wholesale is no longer seen as a stepping stone to the Mults.
How is Unitas performing as a business? Is turnover growing?
As you can imagine, it has been a challenging year for our members – we have seen significant growth in Retail (which makes up 80% of our turnover), but as you would expect foodservice and the on-trade has been severely affected by lockdowns. Trade in these areas is now very strong and we expect to see significant growth this year.
This growth is however being hampered by poor supplier service levels and capacity constraints caused by driver shortages and pressures on the global supply chain. We also know that many of our members’ customers are suffering severe staff shortages, which will have an impact on sales.
It is absolutely critical that we all work together to fix the supply chain issues. There needs to be a fundamental change to the way we look at the supply chain. The current service levels are the worst I have seen and there is no single silver bullet.
Which of the product categories you supply are in growth and which are more challenging?
Following on from last year’s tremendous growth, retail is broadly flat this year, with some big differences between categories e.g. Tobacco is still in growth, Licensed is in down from 2020 but still up versus 2019. Beer is in decline, due to supply issues, but wine and spirits sales are showing good growth. Grocery sales have largely returned to 2019 levels, whilst the Impulse categories (Crisps, Snacks and Soft Drinks) are in positive growth.
OOH is currently showing strong good double-digit growth since the opening up as well as the additional benefits of increased staycations and pent-up consumer demand.
How are the Unitas symbol groups, including Today’s, Day-Today and Lifestyle Express, performing? Is membership still growing?
Membership continues to grow, particularly in Scotland and the North (UWS, UWG and Dee Bee’s)
Across all our members we are supporting over 4,400 stores across both club and symbol.
Covid did slow member growth as many retailers did not want to disrupt things whilst trade was strong, but we are now seeing increased demand from operators to invest in their stores.
How digital is Unitas as a business?
As a support function for our members we see real value in investing in digital solutions, from online bulletins to dedicated member’s hubs, enabling them to provide instant feedback on pricing and promotions as well sharing ideas to improve trading.
We’ve seen a great take up from independent retailers on the Plan for Profit website and app, which has over 10,000 downloads to date. Whilst communication via the various social platforms reaches a combined following of over 12,000 industry bodies and operators.
We do however believe there are significant opportunities to expand in this space. We can utilise digital technologies to further improve communication and productivity as well as leveraging our total scale and reach to create a virtual marketplace for our members and suppliers.
Do you offer any IT support for your members e.g. ordering apps, online support, delivery tracking?
We are building on our already strong Unitas Support Services offer. Members can access preferential rates on a host of leading products and services including digital solutions such as e-commerce platforms. This menu of business support services gives wholesale members and their customers the tools and ability to save more and sell more.
We also launched the Digital Excellence Academy, offering our members advice and support on a range of digital topics relevant to the wholesale industry, such as social media guidance and best practice for B2B transactional platforms.
We’ve also supported members with detailed health check audits on their online platforms. Cyber security is particularly relevant, following a number of high-profile attacks on our industry.
Did your depots remain open during the Covid-19 crisis? Was it difficult to enforce social distancing in-depot?
The vast majority of our members continued to operate under very challenging conditions. The early weeks of lockdown saw a massive increase in demand from panic buying and the switch to top up shopping. Our members did an excellent job of managing a difficult situation and ensured customers and colleagues were able to operate in the safest possible environment.
How has the wholesale industry in general been affected by the Covid-19 pandemic?
The wholesale community were the unsung heroes, continuing to operate in challenging conditions, with limited support from the government and local authorities. I think it took the relevant authorities far too long to recognise both the importance of wholesale in retail distribution and the enormous financial impact on foodservice and on-trade wholesalers. The FWD, with the help of members like ourselves did a great job in highlighting this and getting support for wholesalers in distress.
Suppliers, operators and their staff (particularly delivery drivers), did a sterling job in keeping the nation fed, in the most challenging of circumstances.
The opening up was particularly challenging with restaurants and bars having to restock from scratch and then again having to close at short notice. But the agility and professionalism of our members and their teams ensured that their customers were well looked after.
On a macro-economic scale, the opening up of the larger economies and the increase in money supply has seen a massive uptick in demand which the global supply chains have been unable to cope with. In particular in the Far East where key manufacturing countries are still in lockdown.
The effects of which we are seeing in supplier service levels and price inflation.
In my view, manufacturers need to re-vision their supply chains; challenging “just-in-time”, the outsourcing of logistics and longer term look at opportunities for “near-sourcing” their manufacturing.
Has Amazon become an even greater threat over the last year, given the rise in online ordering due to the pandemic?
The increased threat of online players was very much in evidence, however once again our members have adapted well to the challenge and many have prospered through developing enhanced online capabilities. Amazon and other disruptors constantly challenge us to raise our game, but our members have demonstrated once again that they are up for any challenge.
There is so much more, an agile and customer focused SME can deliver against giants like Amazon. We have to watch them closely and adapt our model to ensure we always beat them on the total customer experience.
What impact do you think Brexit will have on the industry?
The impact of Brexit is most prevalent in staff shortages and increased administration. I am confident that as we adapt and a less confrontational spirit develops between the UK and our European trading partners, we will find a way to trade harmoniously again. As wholesalers we should also be looking to take advantage of new trading agreements to source from a much broader market.
The shortage of drivers is however more of a long-term challenge. This isn’t just a Brexit issue and it will not be resolved by simply increasing Visas. There are driver shortages on every continent except Africa.
The issues of an ageing driver population, working under increased bureaucracy, with poorer working conditions and relatively low wages has been a problem brewing for some time. Government and industry has buried its head in the sand on this one and we now need to address each of the challenges.
The government needs to ensure the process of training and accreditation is simplified and fast tracked, whilst industry needs to look at haulier rates, working conditions, wages and driver facilities.
I am seeing some great examples of our members adapting to resolve this issue. I was with a member last week, who by changing driver working patterns has seen drivers who left for higher pay at supermarkets, return for a better quality of life.
What are your plans to grow the business over the next year?
It’s quite simple, John and the team are focusing on building a customer centric culture that delivers a better experience for our members and supplier partners. The focus is on product and price and excellent customer service.
We strongly believe that there is a direct link between customer satisfaction and profitable growth.
Specifically, we will be engaging with our supplier partners to ensure that within retail, NPD, promotions and pricing delivers real value to our members and their customers.
We will also have a strong focus on driving foodservice and the on-trade. We have some of the biggest independent on-trade and foodservice wholesalers as members and we need to ensure that our supply base is fully engaged to support our members’ ambitious growth plans. After an exceptionally tough 18 months for this sector, there are now a great many growth opportunities for suppliers and members alike.