Wholesalers must find new ways of adding value, rather than trying to fight only on price, if they are to have a prosperous future, delegates at this week’s Scottish Wholesale Association conference were told.
The SWA’s president Eddie Lynagh said members should focus on exploring new opportunties like foodservice, improve staff training and look at introducing new ideas like meal deals and retail clubs.
He said wholesalers must keep adding value in what he dubbed “dangerous times for our industry”. And he added: “If it comes down to price, we will all lose out.”
Lynagh said many burning issues affected the Scottish wholesale sector and the recent acquisition of Scottish Mace wholesaler Aberness by Somerfield had brought these into sharp focus.
Wholesalers also needed to reach out more to the end consumer and work ever more closely with suppliers.
And keynote speaker Gerry Johnson, MD of Booker, warned that the wholesale sector must “remove the fog that often surrounds pricing” to protect retail customers as the multiples moved in on the c-store sector.
Johnson told delegates the historical wheeling and dealing approach of wholesalers had to change. Wholesalers had to help independent customers survive
in the face of an ever-increasing threat from the multiples, said Johnson, who highlighted two Booker initiatives which helped independents compete.
He said Booker had returned £17m last year to its customers through its Spend and Save scheme.
And he said Booker’s Premier fascia, which now had 1,500 stores under its umbrella, also equipped independents to take on the multiples.
Johnson ended with a plea for regulators to reassess the “flawed” decision of the Competition Commission that there were two markets for grocery - top-up and one-stop.
He said: “There is only one market for grocery in the UK and the regulators need to have another urgent look at this.”
Regulators were standing on the sidelines as the multiples fuelled their growth with c-store operations. The buying power commanded by the multiples meant the odds were probably stacked against wholesalers, he said: “Tesco is probably bigger than all the companies in this room today put together.”
Anne Bruce