Wholesale has never been sexy. Sexist perhaps: it’s an industry full of white van men. But not sexy. However, suddenly wholesale is hot. It’s in demand. It’s happening.
Tesco wants in. More stealthily Amazon is turning into a real force. (Its influence in wholesale, as we noted in last week’s Power List, is far more significant than it is on the Amazon Fresh side.) Meanwhile US foodservice giant Sysco has acquired Brakes, following retailer Conviviality’s acquisition of Matthew Clark. And Morrisons has been stepping up its efforts too, not only via its Amazon supply deal but through its joint ventures with the likes of Rontec, Motor Fuel Group, with Palmer & Harvey acting as a distribution partner (while also being hotly tipped to work with Morrisons on the rollout of its Safeway brand for independent retailers). And how long before Asda - which has followed Morrisons down the integrated supply chain route - explores wholesale as a channel?
The sudden interest is no doubt prompting mixed emotions among existing players. On the one hand, it offers the prospect of a big payday, assuming the above moves pay off. On the other hand, the activity and influence is challenging the wholesale industry as never before. As our Big 30 report shows. it’s already under massive pressure. It already operates with wafer-thin margins and for an unlucky 13 of the 30, they have fallen. Add in the national living wage, the Apprenticeship Levy, Brexit, inflation, and it’s little wonder even the most resilient wholesalers are looking to the future with apprehension.
Of all these factors, however, it’s the Booker-Tesco deal that is furrowing wholesale brows the most. Not only at the prospect of independent retailers getting into bed with Tesco. It’s what happens on the physical supply chain side. Suppliers have consciously developed different pack sizes, to make it difficult to compare prices, as well as price-marked packs. If synergies mean those distinctions are torn away, suppliers will lose an awful lot of money while rival wholesalers will be powerless to compete. What’s more, with Tesco owning all the data for all the independent retailers, Big Brother will literally be watching.
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