Margins ‘given away’ as top wholesalers toil

  • Print
  • Share
  • Comment
  • Save

Wholesaler profit margins held over the past year but remain wafer thin, The Grocer’s annual Big 30 report of grocery wholesalers has revealed.

Total sales rose by 5.9%, and pre-tax profits were up by 12%, boosted by a strong performance from Smiths News and Menzies following the demise of Dawson News in 2009.

But margins remained at 1.1% and although just four companies saw a fall in turnover, 12 of the 27 businesses where pre-tax profit figures were available recorded a dip. Makro and WaverleyTBS recorded a pre-tax loss.

Wholesalers would face increased pressures in 2011, warned Charles Wilson, CEO of second-placed Booker

“Consumer spending is going to contract, inflation is picking up and oil prices and interest rates are going up,” he said. “The more you spend on fuel, the more you will have problems.”

Landmark Wholesale MD Martin Williams said the low margins the industry operated at “don’t leave a lot of room for error”.

“Gas, electricity and fuel costs will put a lot of pressure on the supply chain,” he added. “You have got to keep your eye on the ball.”

Palmer & Harvey again topped the table, with sales of £4.2bn. But its profits halved to just £227,000.

“The market has been much more competitive,” said CEO Chris Etherington. “People have been giving their margins away.”

Smiths News increased its turnover by 38% and was the fastest climber in the table to become the fourth-largest grocery wholesaler in the UK, up from seventh in 2010, after buying leases on 20 of Dawson’s depots and mopping up most of its former rival’s old contracts.

Foodservice giant Brakes overtook rival provider 3663 to rank fifth. Its turnover grew by 6.9% to £1.75bn while 3663’s sales fell 0.4% to £1.69bn.

For the first time, The Big 30 has been widened to include on-trade wholesalers Matthew Clark and WaverleyTBS, which ranked 12th and 14th respectively.

Read more
Get the Big 30 report here

Have your say

You must sign in to make a comment

Related images

  • Print
  • Share
  • Comment
  • Save

Grocer jobs Experts in FMCG

Search jobs
Sign in

Newsletter Sign-up


I wish to receive the following newsletters:

For Members

Become a Gold Member to receive these newsletters:

Become a Platinum Member to receive these newsletters:

Become a member of The Grocer



CLICK HERE to search for the products, services and companies you need in the definitive guide to the UK food and drink industry.


The Grocer's commentators and opinion makers