This is despite Asda meeting a vigorous response from the Federation of Wholesale Distributors when it asserted in its submission to the Competition Commission last month that the wholesale sector was growing and profitable (The Grocer, 28 October, p10). FWD director general John Murphy claimed the retailer's figures were related to 2004 and that growth had slowed markedly since then.
But responses to this week's reader panel show many players in the market to be positive about growth this year. Some 86% of wholesalers on The Big 30 list that responded said they expected their company turnover for the first half of 2006/2007 to be higher than that of last year.
While these wholesalers were not so buoyant about first-half profitability, with 57% anticipating it would be higher than last year, readers were confident about full-year profit, with 86% expecting it be to be higher than in 2005/2006.
No doubt Christmas is key to this but the picture on the ground looks to be varied when it comes to the performance of different categories. Confectionery, for example - important at this time of the year - has performed poorly in some wholesalers. One says: "We have seen extreme pressure falling on the confectionery category directly as a result of what we would describe as a lack of innovation within the market along with a general lack of direction from some manufacturers and logistical and operational difficulties from others."
However, despite the government's health message, crisps, snacks and soft drinks performed well in this same wholesaler, and predicts a good year in these categories next year.
Healthier products are showing good growth, however, while many in the poll pointed to decreasing margins on tobacco. Yet again the picture is varied, with one wholesaler saying cigarettes are performing "amazingly well", another saying wine is up and another that alcohol margins are down.
Nearly six in ten wholesalers say they do not expect gross margins to be higher than last year.