At first glance, very little has changed in this year’s Big 30 wholesalers list.
The standout performance comes from Booker. As fuel prices rocket, cash & carries are dominant, apart from Makro (though its losses did halve). Brakes continues to be hamstrung by its sizeable debt. Same names, same story. Only Capper & Co has disappeared from the list, following its acquisition by AF Blakemore. And this despite the fact that margins, always wafer thin, crept down again (while Booker and Bestway accounted for 61% of the sector’s total profits).
So. The consolidation everyone has predicted is playing out very slowly indeed. Which is all the more surprising since competition is only increasing: cash & carries are treading on the toes of foodservice players in concerted fashion. And let’s not forget competition from supermarkets. As Steve Parfett reports in his new column this week, one of his customers spent £20,000 on alcoholic drinks not from a rival wholesaler. He picked the booze up from a supermarket.
On the retail side, the number of independent customers is also declining. David Sands was bought by The Co-operative Group last month, following the sales of Botterills and Mills Group and the collapse of Haldanes. In the meantime, eating out is predicted to fall again in 2012, despite reports this week of an Olympics-inspired explosion in fast food outlet openings.
Where might consolidation come from? Bestway has been frustrated in its attempts to make acquisitions in the past year, despite an open chequebook. Meanwhile, Booker shows no real appetite for a major consolidation play, preferring bite-sized chunks to support organic growth.
Might the consolidation come from supermarkets? With Asda and Morrisons pulling out of the running for Iceland - the last grocery retail landgrab - there are no easy ways to pick up market share at the moment, as Tesco’s lowest market share in seven years amply demonstrated this week. That’s why Asda has recently been stepping up its efforts on the wholesale side.
We’ve even heard rumours Morrisons is interested in Booker. Now that would shake things up.
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