Wholesalers claim foodservice represents the best opportunity for them to grow their business, according to The Grocer’s latest reader panel.
The vast majority (80%) of the leading wholesalers that were surveyed said foodservice would form a major part of their plans to survive and grow their businesses as the dominance of the multiples in the grocery sector continued to grow.
One leading wholesaler said: “Foodservice is a growing area and it is undoubtedly the best opportunity at present. Foodservice products account for less than 6% of our sales revenue, but these sales generate a much greater profit contribution.”
While wholesalers clearly wanted to develop their foodservice offers, a number expressed concerns over whether or not they had the necessary expertise or the ability to compete with the major national foodservice specialists. Of the wholesalers questioned, 60% said that they intended to expand and increase their foodservice offer during 2006. This was the same figure as those who felt that they could compete with the big foodservice specialists.
There are four foodservice specialists in The Grocer’s Big 30 list of the UK’s biggest wholesalers, with both Brakes and 3663 First For Foodservice in the top five and boasting turnovers in excess of £1bn.
One cash and carry operator said that traditional wholesalers could compete and had a number of advantages over the big players. He said: “Proximity and local knowledge of the customer base mean that a faster delivery service can be offered. Local wholesalers can also offer a highly convenient service that cannot be rivalled by remote competitors.”
Four out of ten of those quizzed were worried that developing a bigger foodservice offer could harm their existing grocery business.
US number two grocery chain Albertsons’ full-year net profit to February 2 fell 10% to $462m on total sales up from $39.8m to $40.4bn. It added that fourth-quarter net profit fell 16% to $162m on sales down 9% to $10.2bn.

All pharmacies in Wal-Mart’s US stores will stock the emergency contraceptive pill Plan B from mid-March.
Retail sales in the 12 countries that have adopted the Euro increased 0.8% in January from the previous month and 0.9% year-on-year, according to the EU’s statistics office Eurostat. Sales of food, drink and tobacco rose 1% in January compared with December, but were down 0.2% from the previous year.

Anheuser-Busch International has teamed up with Heineken Russia in a licensing agreement to brew, sell and distribute the Bud trademark in Russia. Brewing was due to begin within months at Heineken’s brewery in St Petersburg. Roland Pirmez, chief executive of Heineken Russia, said: “The Bud brand will fit perfectly within our existing brand portfolio.”

Tate & Lyle has formed a joint venture with an Israeli partner to build and operate a sugar plant in Israel. The group said that the plant would partially replace traditional sugar imports from the EU, which will be restricted following the European sugar regime reform.

Wal-Mart is planning to double its organic food range within the next couple of weeks. Speaking at a recent conference, DeDe Priest, senior president of dry grocery at Wal-Mart, said that it would double its offering to make organic food accessible to all and “knock out the myth that it’s just for the rich”.
Ronan Hegarty
French retailer Carrefour is planning to open 100 stores this year, more than double the average between 2000 and 2004. In full-year results, it revealed that group net profit rose to E1.81bn from E1.79bn a year earlier, on sales up 2.5% to E74.5bn.
US grocery chain Kroger returned to profit. In full-year results, it reported net profit of $958m - up from a net loss of $104.2m the year before. Like-for-like sales increased 3.5%, or 5.3% including fuel.
n sugar plant
n Profit falls
n 100 stores
n Kroger on up
n plan b offer
n sales rise
n bud for russia
n going organic