Delivered wholesaler Palmer & Harvey is taking aim at cash & carries with a new initiative to wean independent retailers off visits to their local depot.
P&H this week pledged to match cash & carry prices on 600 top-selling branded lines - which make up 55% to 57% of non-tobacco sales. It has also launched an availability guarantee that if one of the 600 lines is out of stock, the retailer will get it free next time.
Sales and commercial director Martyn Ward said he wanted to “dispel the myth” that using a delivered wholesaler was more expensive than a C&C - and claimed that shopping at a C&C actually cost retailers a £2,515.60 annual premium.
The figure is made up of fuel costs, paying a staff member to look after the shop while the owner is at the C&C, and the lost opportunity of a £500 cashflow benefit from P&H’s offer of 14 days’ credit.
“Buying through P&H also gives retailers more security, as products are delivered straight to their store and they don’t have to worry about spending time in a C&C car park with high-value, easily stolen goods like tobacco and alcohol,” Ward said.
The price match would be funded by P&H’s own margins, added Ward, and he insisted it hadn’t raised the prices of other lines. “It’s simply an equation of what uplift we expect and how that funds the activity,” he said. “This is not a short-term initiative - we believe we can sustain it through sales increases.”
The prices at rival C&Cs across the country will be checked independently each week by ESA. The guarantee covers regular, not promotional prices.
Price checks carried out before launching the scheme showed P&H already offered the same price for 300 of the lines, was actually cheaper on 90 lines and more expensive on around 200.
This is P&H’s second major pricing initiative of the year following the launch of its tobacco pricing strategy in August, which promised the “most competitive price in the sector” if retailers ordered a certain number of non-tobacco outers.