Big Food Group is embarking on a series of initiatives to boost supply chain efficiency, including the roll-out of a sales-based ordering system at Booker and the closure of two distribution centres.
Speaking as the Big Food Group published its full year results and gave an update of current trading, chief executive Bill Grimsey said Booker was planning to roll out sales-based ordering to all branches supplied by its Livingstone depot.
If this proved successful, a nationwide roll-out would follow later this year, reducing inventory and freeing up working capital, said Grimsey.
Separately, the proposed closure of depots at Didcot and Belshill would cut fixed costs, he added. “Booker branches and Iceland stores currently serviced by these depots will get their deliveries from Wellingborough and Livingstone.”
Online auctions would also be ramped up to cut Big Food Group’s procurement bill, although the group was keen not to compromise relationships with suppliers, said Grimsey.
“You are not going to inspire suppliers to invest in you if you put the contract up for auction every two years.”
Operational efficiency was also a priority at Iceland, he said. “Availability is way off.”
Pre-tax profit in the 53 weeks to April 2 was up 35% to £50.1m - just short of analysts’ forecasts. Sales were up 1.7% to £5.15bn.
However, like-for-like sales for the six weeks to May 14 were down 0.8% - a reflection of increasing competition and price competitiveness in the market, said Grimsey.
“Structural changes in the industry have altered the pricing environment.”
Elaine Watson