Everyone should worry about Tesco, says Charles Wilson. This week’s guest editor tells Adam Leyland why – and what else he’s keeping an eye on.
With Booker’s one-stop solution, people have likened your approach to Tesco. Is that fair?
Tesco is the most scary beast in the UK grocery industry and so you keep a really close eye on them, but you learn from them as well. Our strategy is more driven by our customers.
When you’re in retail the gap between consumer spend is probably about threefold. When you’re in wholesale we’ve got customers spending about £10,000 a week with us.
A customer once said to me: ‘Charles when you screw up you lose your job. If you screw up I could lose my business.’
So we’re far more bound to the future of our customers than even Tesco can say. But who is it that keeps me awake at night? Tesco.
Why is Tesco such a scary beast?
Because as the Competition Commission puts it, they buy better than we do.
Tesco has an efficient supply chain. They’ve gone into delivery, they’ve gone into internet. I don’t think it will ever work for them moving into direct wholesale but you’re paranoid about them.
Did people in garden centres 10 years ago think they would own Dobbies and be a serious threat? Anybody who is in retail or wholesale that is not worried about Tesco is missing the point.
How big a threat are Tesco and the multiples to the independent trade? A bigger threat than duty fraud?
Internally, we say that in beer, wines and spirits we’re between a rock and a hard place. The rock is duty avoidance and the hard place is multiple pricing.
Sometimes we gain from multiple pricing. I’ll send people in to buy palletloads of something if it’s selling at a great price cheaper than we can buy it, and our customers will do likewise.
Everyone focuses on how hard supermarkets ‘beat up’ suppliers. Are you ‘beating up’ yours?
I hope we’re different. Wholesalers are a route to market for suppliers. You have to have good relationships with them.
There is no point in me bashing the table and saying we’re going to delist this or that, because some of my customers will want those products. I don’t control the consumer in the way a multiple retailer does.
How is trade in India progressing?
India has gone well. We opened a branch in Mumbai in September 2009. It’s one of the busiest branches we’ve got.
We’re in the process of opening branch number two, that’s also in Mumbai, and then we’re in the process of opening another branch which is outside Mumbai in partnership with a local company. We’re learning a lot. It’s helping us back in the UK, and we’re also taking something there.
Do you plan to open more UK depots?
We’ve got 172. That’s the number we need. I don’t really think consolidation is the story. Our job is to improve choice, price and service for the customers we’ve got. That’s the key metric we look at rather than consolidation.
You recently bought Ritter-Courivaud and Classic Drinks. Do you like to keep the industry guessing?
But we don’t. Back in 2005 we said we were going to focus the business, drive it and then broaden it and we’ve been doing that for five and a half years. We’ll be doing this in another five years. We are probably the least surprising.
What are you doing with Ritter-Courivaud and Classic Drinks?
We are learning. Ritter is the best in the business, and some useful product additions are being introduced into the core Booker business.
With Classic, we bought into a competitive market and we’ve been learning about the salesmanship, how you manage the debtors, how you do the on-trade delivery. We’re pretty quick learners.
Stuart Rose and Andy Bond: tips for the next generation (26 February 2011)
Editor’s Comment: Grocery leads way as perfect storm looms (26 February 2011)