The profit margins of the UK’s 30 largest grocery wholesalers have slipped again to an even thinner 1.3%, The Grocer’s Big 30 has revealed.
Though turnover rose 3.2% to £27.6bn, margins were down from 1.4% last year, as pre-tax profits fell 4% to £371.2m.
The dip was chiefly down to the performance of Makro, which is making its last appearance on the rankings before its results are combined with Booker this year.
Although Makro reported a 13.3% increase in sales in the 15 months to 31 March 2013, it made a hefty pre-tax loss of £104.5m. The only other wholesaler to report a pre-tax loss was Palmer & Harvey, the UK’s biggest wholesaler.
Without Makro, the profit margin for the Big 30 would have been 1.8%, with profits up 6.5% and sales up 2.9%.
Overall, wholesalers enjoyed a relatively strong 2013. As many as 21 companies reported an increase in turnover, led by Matthew Clark whose sales rose 18.9% to £718m following new business wins and acquisitions.
Profits rose at 19 of the 29 wholesalers where figures were available. The biggest increase was reported by 3663, up 138.9% to £36m.
Despite the positive numbers, wholesalers have called on government to help the sector by increasing support to small businesses and to tackle the illicit trade. Bestway MD Younus Sheikh said the illicit trade was having a “devastating effect” on its customers.
This year is also The Grocer’s 10th Big 30. Since its launch in January 2005, turnover has increased 36.8%, from £17.4bn to £27.6bn. The Big 30 started tracking profits in 2007 and since then profits have increased 26.5%, from £293.3m to £371.2m. Profit margins have fluctuated, hitting a high of 1.8% in 2008 but a low of just 0.8% in 2012.
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