The company has evolved from its roots as an independent retailer into the fourth biggest wholesaler in the UK, according to The Grocer's Big 30 rankings. With the £100m acquisition of Batley's last year, Bestway is now the second-largest and most profitable cash and carry operator in the UK, with an annual turnover of £1.7bn. It serves 100,000 customers though its 49 branches and delivered services.
With success has come plenty of plaudits. Last week the company won The Grocer Gold award in the wholesale category. The company's Best-In own label range was also nominated for an award. And last October, Bestway founder Sir Anwar Pervez won The Grocer Cup for Outstanding Business Achievement in recognition of his long and successful career.
The challenge for Bestway's management team, led by MD Younus Sheikh, is to continue the superb progress in a difficult wholesale environment. The past two years have been challenging for wholesalers, with increasing competition from the multiples, and fuel price and minimum wage all taking their toll.
But taking over competitor Batleys shows that the Bestway management is keen to stay ahead of the game and according to Sheikh, the integration process has gone well. He says: “The success of the Batleys takeover has been totally calculated. It has been down to taking the whole thing carefully and slowly and not making any hasty decisions.”
Bestway reviewed both businesses and found that Batleys and Bestway had almost completely different customer bases, even in cities where both were present, admits Sheikh. This encouraged them to retain the Batley's brand and implied that they would be rash to simply impose the Bestway model onto the Batleys business.
Bestway has therefore taken a pragmatic approach to integration. Sheikh says: “Where the Bestway model is better, it has been adopted, but where Batleys is better, those strengths are being rolled out to Bestway.”
For example, last month Bestway replicated Batleys Xtra Local Club marketing initiative in Bestway with its Best-In Club. The club provides regular promotional deals with top discounts for club members. “The success that Batleys has seen from the launch of their Xtra Local Club encouraged us to start a similar scheme for Bestway customers”, says Sheikh. “The choice of products available means that there will always be something to appeal to retailers, which in itself endorses the Bestway principles of continuing to support and build business for the independents.”
The Best-In label has been introduced to Batleys depots, while Buddies, Batleys own label for childrens' sweets and drinks, has been introduced to Bestway customers. Bestway also launched its own-label wine brand Cellar Estates, earlier this year.
Bestway has been more cautious on the administrative front, though that is changing. While most companies would have followed up a £100m takeover by immediately squeezing out operating efficiencies, the company added four Bestway directors to the Batley's board and continued both businesses as they were. It did this to maintain continuity and avoid any chaos that might cost it valuable customers. The company says this strategy has been successful.
In accounts for the year ended June 2005 Bestway reported that in the preceeding five months Batleys had contributed £237.7 million towards Group turnover and £3.9 million in operating profits. A company spokesman says that Bestways expects to see healthy year on year growth from both the Bestway and Batleys operations this year.
Several changes are underway. This year Bestway began a review of the administrative and property functions in the business. As a result, accounting functions will be transferred from Batleys' Leeds office to Bestway's in Park Royal, West London, and some staff will be made redundant. Other changes are in the works.
The challenge for Bestway will be to successfully complete these changes without damaging its culture. Both Sheikh and Pervez have emphasized in the past that the key to Bestway's success is its people.
Number of Depots: 49
Number of Employees: 4,000
Type of Operation: Cash and Carry & Delivered Wholesaler