Is the cash & carry dead? Of course not. While Blakemore was unable to sell most of its depots when it closed its cash & carry operation this summer, the biggest wholesale casualties in recent years have actually been delivered (P&H, Conviviality, DBC). And though cash & carries are having to invest to modernise their ops, it’s a lot cheaper than switching to delivered. Cash & carry is cheap and cheerful. Delivered is expensive, complex and relentless in its need for investment and upgrades.
As our report into the future of cash & carries shows, it also helps that recent consolidation has given cash & carries a much-needed shot in the arm. As has the Alcohol Wholesale Registration Scheme. Booze sales are still soaring for many as the grey market disappeared, at a stroke, in April last year - though for wholesalers who were using that channel, if sales have not fallen, margins will be a lot tighter.
Other legislation is proving less benign. Of all the anti-tobacco legislation in the past decade or so, the ban on price-marked packs has probably been the most significant in terms of sales and cashflow (for retailers and wholesalers).
Another issue has been the anti-money laundering legislation that came in last year. For some cash & carries that’s likely having an impact on revenues from customers with single day-pass licences, and also threatens trade on the export side, as you need to be able to prove you know who you’re selling to and that you know they’re legit.
Next May there’s also new ‘track and trace’ legislation coming in on the tobacco side. We’ve yet to hear from HMRC how precisely this will be implemented, but the implications are likely more onerous for wholesalers than retailers.
The Dairymen 2018 Back to the Future: What’s in store for dairy in 2019
Add to this a supplier base burnt by recent business failures, greater demand for delivered services from retailers, the expansion of discounters, the growth of online retail, the ever-present threat from supermarkets, and competition among cash & carry rivals, and it’s a tough market out there. But as our report shows, the best and the smartest are making cash & carry work. We salute you.
There’s nothing new under the sun - like this week’s ‘new’ report proving full-fat milk is good for you, the latest in a long line of scientific papers on the topic. But it’s somehow fitting that a report harking back to the past as a possible insight into the future is coming out in the week of The Dairymen, because our supplement explores how in many ways UK dairy is going back to the future. Such as how milkmen are enjoying a resurgence, as the milk float evolves into a D2C model for online grocery deliveries; or how dairy brands are embracing old-fashioned values to appeal to millennials.
This isn’t to say the industry is stuck on repeat. And our supplement also unveils how dairy innovators are finding futuristic solutions to past problems - developing packaging to replace plastic, and turning previously wasted by-products into valuable ingredients. It even takes an exclusive look at US bioengineers making animal-free milk out of GM yeast. Now that, perhaps, is new - though personally, I’ll stick to full-fat.
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