Wholesalers are still holding their own despite tough trading conditions brought about by soaring costs and pressure from the major multiples.
That is the clear trend identified by the second annual Big 30 survey of leading wholesalers by The Grocer.
The overall finding is likely to come as a relief to those who feared that the growing power of the multiples was threatening the viability of the industry.
Of the 30 wholesalers that made our list, 21 enjoyed a growth in sales during 2005, while seven recorded double-digit sales hikes.
However, six returned a loss and three had flat sales, with increased competition cited as the reason. Hard hit was Spar wholesaler Appleby Westward, where sales fell 16% to £142m. Managing director Ian Connell said that the shortfall was due to the fact it was no longer supplying 63 Conveco stores that were bought by The Co-operative Group in 2004.
Elsewhere, last year’s demise of forecourt retailer Fuelforce contributed to WH & HM Young losing £10m of sales, while CJ Lang and TRS both lost sales as they streamlined operations. CJ Lang closed two depots in 2005 and TRS also closed one.
Despite this, John Murphy, director general of the FWD, said the survey showed the sector’s strength and professionalism.
He said: “Levels of investment were impressive and overall growth is encouraging. Wholesalers have shown that they are both resilient and innovative operators in an economic climate that has even had Gordon Brown in trouble.”
Nevertheless, retail expert Professor John Fernie of Edinburgh’s Herriot-Watt University cited the multiples as a major pressure on the sector on top of rising business costs.
Fernie said: “It doesn’t look as if conditions are likely to get any better. The success wholesalers have enjoyed comes from merger activity, added value services and diversification into new areas such as foodservice.”
This year’s list showed the effect of substantial merger activity. Immediately after the publication of the first Big 30 list last January, Bestway bought Batleys for £100m, which took it from number six to four. Blueheath rose from 30 to 19 after it acquired CTM Wholesale and AC Ward & Son.
Delivered wholesaler Palmer & Harvey McLane is once again at the top of The Big 30.
Restructuring at nearest rival Booker meant it extended its lead at the top. While P&H’s turnover remained flat at £3.53bn during 2005, Booker’s fell 7.4% to £3.23bn.
Foodservice was even more prominent. Brake Bros and 3663 were third and fifth respectively, while DBC Foodservice and Wing Yip apeared in The Big 30 for the first time.
>>p41 The Big 30
Ronan Hegarty
That is the clear trend identified by the second annual Big 30 survey of leading wholesalers by The Grocer.
The overall finding is likely to come as a relief to those who feared that the growing power of the multiples was threatening the viability of the industry.
Of the 30 wholesalers that made our list, 21 enjoyed a growth in sales during 2005, while seven recorded double-digit sales hikes.
However, six returned a loss and three had flat sales, with increased competition cited as the reason. Hard hit was Spar wholesaler Appleby Westward, where sales fell 16% to £142m. Managing director Ian Connell said that the shortfall was due to the fact it was no longer supplying 63 Conveco stores that were bought by The Co-operative Group in 2004.
Elsewhere, last year’s demise of forecourt retailer Fuelforce contributed to WH & HM Young losing £10m of sales, while CJ Lang and TRS both lost sales as they streamlined operations. CJ Lang closed two depots in 2005 and TRS also closed one.
Despite this, John Murphy, director general of the FWD, said the survey showed the sector’s strength and professionalism.
He said: “Levels of investment were impressive and overall growth is encouraging. Wholesalers have shown that they are both resilient and innovative operators in an economic climate that has even had Gordon Brown in trouble.”
Nevertheless, retail expert Professor John Fernie of Edinburgh’s Herriot-Watt University cited the multiples as a major pressure on the sector on top of rising business costs.
Fernie said: “It doesn’t look as if conditions are likely to get any better. The success wholesalers have enjoyed comes from merger activity, added value services and diversification into new areas such as foodservice.”
This year’s list showed the effect of substantial merger activity. Immediately after the publication of the first Big 30 list last January, Bestway bought Batleys for £100m, which took it from number six to four. Blueheath rose from 30 to 19 after it acquired CTM Wholesale and AC Ward & Son.
Delivered wholesaler Palmer & Harvey McLane is once again at the top of The Big 30.
Restructuring at nearest rival Booker meant it extended its lead at the top. While P&H’s turnover remained flat at £3.53bn during 2005, Booker’s fell 7.4% to £3.23bn.
Foodservice was even more prominent. Brake Bros and 3663 were third and fifth respectively, while DBC Foodservice and Wing Yip apeared in The Big 30 for the first time.
>>p41 The Big 30
Ronan Hegarty
No comments yet