A year on from our first feature on ten key players in wholesale, Sonya Hook finds out how they they have driven business forward
This time last year we identified and profiled the ten delivered wholesale and cash and carry operators who we felt were making waves in the sector.
Back then, we said these operators were challenging the status quo, and exemplified a sector that continued to thrive thanks to its innnovation and entrepreneurial spirit.
Twelve months on, and our view hasn’t changed. Our ten operators are still making waves - whether it is developing new retail clubs, investing in new depots and facilities or, in the case of Blueheath, successfully floating on the Alternative Investment Market, proving wrong those who say the City will never be interested in wholesaling
Sure, it remains a tough market, with the inroads made by the major retailers into the convenience market making the job of all wholesalers serving independent retailers that much harder.
But the 10 companies featured on these pages, and the next, are adapting and evolving their strategies to compete in this rapidly changing retail landscape.
And they give us the confidence to believe that wholesaling still has a bright future.
Gino Paletta believes there is a very strong future for independents if they reinvest. “But they have to have the right standards and the right ranges of lines like wines and spirits. The ones with full convenience offerings will survive.”
In his role at Today’s Group member CTM, he does his best to help them achieve this. He is positive about the 63,000 sq ft depot he told us about last year and said a £50,000 investment in scanning equipment has improved the picking facility and reduced mistakes.
The company has taken on board the Nisa-Today’s Express symbol and is hoping to have some retailers moved to it by Christmas.
In the long term, Paletta hopes to offer his customers a symbol group banner under the CTM brand.
CTM will also be progressing with its recently launched online delivery service. “I see this as a long-term investment.”
A year ago Dhamecha Cash and Carry, the second largest supplier to independents in the capital, told us the secret of its success relied on its attention to detail and competitive pricing strategy. These two elements are continuing to bring in results.
Trading is competitive but turnover for the company was £258m for the year to March 2004, up from £225m a year earlier. The company is hoping to reach £270m for the year to March 2005.
Pradip Dhamecha is keen to maintain aggressive expansion. The company opened its fifth branch at Watford in July last year, and he says it has progressed well, adding: “We will be looking for the sixth in the later part of next year.”
A new fascia in partnership with the Today’s Group is the Day 1 fascia scheme. Dhamecha hopes to have 30 to 40 shops refurbished in accordance with the package by the first quarter of next year.
Last year Peter Lowrie told us about the company moving into the franchise business for the first time by recruiting delivered customers to a new Lifestyle fascia. He says: “We are doing an awful lot of work on the roll-out of this and there are now 22 with the Lifestyle Express fascia.” The target for next year will be to reach a total of 50 stores.
The company purchased eight Right Choice stores last year and Lowrie says these are now all also converted to the Lifestyle fascia. They have also all been refitted “particularly with chilled beer and various impulse ranges”, he notes.
The planned sales target of £26m that was set last year has been met. The company has also built in a new management structure, which includes new staff on operational control. “This broadens the responsibilities and structures the business to ensure it is better managed,” he says.
Since last year, Parfett’s Go Local club has rapidly shot up from 200 to 250 members. “We are working together with others to create a national offering,” says Parfett.
Turnover was around £210m for the year to June 2004 and this year Steve Parfett has also been busy with bold expansion plans. “I have been up to my eyes in it,” he says.
At 75,000 sq ft, with a smaller footprint but taller than the depots in Stockport and Aintree, the company’s sixth C& C in Sheffield is virtually finished and is “frantically being stocked” in order to be ready for Christmas.
Parfett looked at many areas but sees a lot of potential in Sheffield.
The company has also replaced its wine range, which Parfett describes as “somewhat tired and a bit anonymous”, with the Vintners Collection, which he says has been a huge success.
Lee Furness had a lot on his plate when we last spoke, shortly after integrating wholesaler AR Daunt into the business. The combined company, part of the Key Lekkerland delivered wholesale group, is now one of the largest independent wholesalers with 3,000 customers.
Turnover at the £140m business has been pushed up since Young acquired AR Daunt in May 2003, so added capacity was urgently needed to handle increased demand.
The company has now expanded the Leeds depot by 18,000 sq ft, adding a further 40% capacity and increasing both the picking space and the range carried. “This is all going to schedule and will be open in a couple of months,” said Furness. He is now focused on making best use of the new space. “We will be looking to consolidate our seasonal depot, which is based up the road, into the extended depot,” he says.
United Wholesale’s aggressive promotional activity has paid off. Sarwar says that the company, which currrently has two depots in Glasgow, has had a great year with turnover up 50%.
In February it launched its Privileged Customer Club and has 73 customers signed up. With a focus on quality rather than quantity, Sarwar notes: “We want 100% compliance on this scheme.”
Last month it launched the second stage of PCC, a day-to-day fascia package for which 23 have signed up.
It is about to launch distribution for a delivery operation at its main site. Says Sarwar: “In one month we will be fully set up to do deliveries in Glasgow.” He wants to serve the north of the city better and remains ambitious for a third site in Dundee or Edinburgh.
“Next year I hope to see growth from the delivery side as the cash and carry business is at full capacity.”
Douglas Gurr
Co-founder and CEO, Blueheath
It has been a great year for online delivered wholesaler Blueheath, as a strong set of results this week testified. For chief executive Douglas Gurr, the secret of its success has been constant growth.
The company has boosted its distribution by recruiting a second delivery partner: the Owner Drivers Network. The organisation is a sales alliance of independent regional operators, which, together with British Bakeries’ van fleet, gives Blueheath access to 1,250 vehicles.
The extra vans are vital as Blueheath expands its customer base. Several contracts with forecourt operators are due to be announced, following a flurry of deals, most recently with Texaco in April.
The leisure industry is also a key target, says Gurr. Gala Bingo, Vue Cinemas (the new name for Warner Cinemas) and UGC cinemas all signed up for Blueheath’s services. “We’re interested in delivering to outlets between 500 sq ft and 3,500 sq ft,” says Gurr. “That would include railway outlets, m-way service areas and small foodservice operators. Foodservice will be a forthcoming focus for us.”
The company has also been busy developing its business with newsagents and sub-post offices after deals with the National Federation of Retail Newsagents and Postmasternet in May. The organisations agreed to promote Blueheath services to their retail members.
Joining wholesale buying group Landmark in February generated additional leads, says Gurr: “We’ve got great things out of that, such as access to a quality own label range in the form of Landmark’s Lifestyle label.” The move created a lot of supplier leads. For example, Gurr says: “In June we were invited to give a presentation at Landmark’s conference in Monte Carlo in front of 200 suppliers. Twenty one-on-one meetings came out of that.”
Raising £18.5m by launching on the Alternative Investment Market in July has instilled trust in the eyes of manufacturers, he adds. But he admits: “We’ve not been as proactive with manufacturers as we have with retailers. We already deal with most major suppliers and in fact we took 200 skus out this year, tightening our concentration on 3,500 core lines.”
In the last six months, new in-house IT has allowed manufacturers and retailers to identify bestselling lines and target sectors where they sell the most. “We’ve designed online, real-time systems giving retailers a full view of sales at each of their sites and allowing manufacturers to see who’s buying what products where.”
>>p37 Alternative Investment MarketRobert Lowe
General manager, Hyperama
Hyperama, the West Midlands-based cash and carry group that was spun out of Chinese food importer and distributor JK Foods in September 1992, reports a stable financial outlook with turnover in excess of £100m. There are plenty of initiatives in the pipeline, says Lowe: “The business is now progressing and we want to move it further forward.”
Hyperama has set up a form of retail club which involves providing retailers with display material and other forms of support. This has been a positive step and Lowe believes it has been successful as part of the group’s plan to educate retailers about range and display.
The company remains open-minded about expansion possibilities, and as Lowe states: “If the right opportunity turned up for another depot in the right location we would be able to consider it now whereas we probably wouldn’t have been able to a year ago.”James Ward
Managing director, AC Ward
Following a successful bedding in of Saxton’s delivered wholesale business, AC Ward has seen plenty of activity.
The company recruited David Ellis from Palmer & Harvey McLane/Mace eight months ago to head its symbol operation. Planning is high on the agenda, which, according to James Ward, has, “resulted in restructuring our field sales team to bring stronger focus to our symbol stores”.
This initiative coincided with the introduction of its concept store format. “This is an affordable offering for those retailers wishing to invest in their future by way of a total store redevelopment programme,” says Ward. The first of these stores will go live in November.
“Our plans are to be the leading independent wholesaler in East Anglia, London and the south east. We are well positioned to consolidate on our strong base and drive the business forward.”Raj Chatha
Managing director, European Food Brokers
Raj Chatha was the MD that last year we said was “certainly not afraid to go out on a limb”. His strategy has produced impressive results.
He launched 1Stop4, the retail club for independents, in 2001, followed by The Local, aimed at smaller independents, both of which accrued an impressive amount of members in a short space of time. Since last year he has launched a franchise scheme targeted at the 75% of its club members that are off-licence retailers, giving them the full package of promotions, fascia and more.
Chatha is confident that turning the usual c-store offering on its head with 70% booze and 30% convenience is a franchising avenue with a lot of potential.
For Whitalls Wine, its delivered wholesale arm, there are plans for three depots to add to those in Halifax, Walsall and Gateshead. Whitalls is the sole supplier to Booze Buster and Wine Cellar.
Gino Paletta Managing director, CTM
Pradip Dhamecha Chief executive, Dhamecha Cash & Carry
Peter Lowrie Managing director, Lowrie’s Cash & Carry
Steve Parfett Managing director, AG Parfett
Lee Furness Managing director, WM & HM Young
Athif Sarwar Managing director, United Wholesale
This time last year we identified and profiled the ten delivered wholesale and cash and carry operators who we felt were making waves in the sector.
Back then, we said these operators were challenging the status quo, and exemplified a sector that continued to thrive thanks to its innnovation and entrepreneurial spirit.
Twelve months on, and our view hasn’t changed. Our ten operators are still making waves - whether it is developing new retail clubs, investing in new depots and facilities or, in the case of Blueheath, successfully floating on the Alternative Investment Market, proving wrong those who say the City will never be interested in wholesaling
Sure, it remains a tough market, with the inroads made by the major retailers into the convenience market making the job of all wholesalers serving independent retailers that much harder.
But the 10 companies featured on these pages, and the next, are adapting and evolving their strategies to compete in this rapidly changing retail landscape.
And they give us the confidence to believe that wholesaling still has a bright future.
Gino Paletta believes there is a very strong future for independents if they reinvest. “But they have to have the right standards and the right ranges of lines like wines and spirits. The ones with full convenience offerings will survive.”
In his role at Today’s Group member CTM, he does his best to help them achieve this. He is positive about the 63,000 sq ft depot he told us about last year and said a £50,000 investment in scanning equipment has improved the picking facility and reduced mistakes.
The company has taken on board the Nisa-Today’s Express symbol and is hoping to have some retailers moved to it by Christmas.
In the long term, Paletta hopes to offer his customers a symbol group banner under the CTM brand.
CTM will also be progressing with its recently launched online delivery service. “I see this as a long-term investment.”
A year ago Dhamecha Cash and Carry, the second largest supplier to independents in the capital, told us the secret of its success relied on its attention to detail and competitive pricing strategy. These two elements are continuing to bring in results.
Trading is competitive but turnover for the company was £258m for the year to March 2004, up from £225m a year earlier. The company is hoping to reach £270m for the year to March 2005.
Pradip Dhamecha is keen to maintain aggressive expansion. The company opened its fifth branch at Watford in July last year, and he says it has progressed well, adding: “We will be looking for the sixth in the later part of next year.”
A new fascia in partnership with the Today’s Group is the Day 1 fascia scheme. Dhamecha hopes to have 30 to 40 shops refurbished in accordance with the package by the first quarter of next year.
Last year Peter Lowrie told us about the company moving into the franchise business for the first time by recruiting delivered customers to a new Lifestyle fascia. He says: “We are doing an awful lot of work on the roll-out of this and there are now 22 with the Lifestyle Express fascia.” The target for next year will be to reach a total of 50 stores.
The company purchased eight Right Choice stores last year and Lowrie says these are now all also converted to the Lifestyle fascia. They have also all been refitted “particularly with chilled beer and various impulse ranges”, he notes.
The planned sales target of £26m that was set last year has been met. The company has also built in a new management structure, which includes new staff on operational control. “This broadens the responsibilities and structures the business to ensure it is better managed,” he says.
Since last year, Parfett’s Go Local club has rapidly shot up from 200 to 250 members. “We are working together with others to create a national offering,” says Parfett.
Turnover was around £210m for the year to June 2004 and this year Steve Parfett has also been busy with bold expansion plans. “I have been up to my eyes in it,” he says.
At 75,000 sq ft, with a smaller footprint but taller than the depots in Stockport and Aintree, the company’s sixth C& C in Sheffield is virtually finished and is “frantically being stocked” in order to be ready for Christmas.
Parfett looked at many areas but sees a lot of potential in Sheffield.
The company has also replaced its wine range, which Parfett describes as “somewhat tired and a bit anonymous”, with the Vintners Collection, which he says has been a huge success.
Lee Furness had a lot on his plate when we last spoke, shortly after integrating wholesaler AR Daunt into the business. The combined company, part of the Key Lekkerland delivered wholesale group, is now one of the largest independent wholesalers with 3,000 customers.
Turnover at the £140m business has been pushed up since Young acquired AR Daunt in May 2003, so added capacity was urgently needed to handle increased demand.
The company has now expanded the Leeds depot by 18,000 sq ft, adding a further 40% capacity and increasing both the picking space and the range carried. “This is all going to schedule and will be open in a couple of months,” said Furness. He is now focused on making best use of the new space. “We will be looking to consolidate our seasonal depot, which is based up the road, into the extended depot,” he says.
United Wholesale’s aggressive promotional activity has paid off. Sarwar says that the company, which currrently has two depots in Glasgow, has had a great year with turnover up 50%.
In February it launched its Privileged Customer Club and has 73 customers signed up. With a focus on quality rather than quantity, Sarwar notes: “We want 100% compliance on this scheme.”
Last month it launched the second stage of PCC, a day-to-day fascia package for which 23 have signed up.
It is about to launch distribution for a delivery operation at its main site. Says Sarwar: “In one month we will be fully set up to do deliveries in Glasgow.” He wants to serve the north of the city better and remains ambitious for a third site in Dundee or Edinburgh.
“Next year I hope to see growth from the delivery side as the cash and carry business is at full capacity.”
Douglas Gurr
Co-founder and CEO, Blueheath
It has been a great year for online delivered wholesaler Blueheath, as a strong set of results this week testified. For chief executive Douglas Gurr, the secret of its success has been constant growth.
The company has boosted its distribution by recruiting a second delivery partner: the Owner Drivers Network. The organisation is a sales alliance of independent regional operators, which, together with British Bakeries’ van fleet, gives Blueheath access to 1,250 vehicles.
The extra vans are vital as Blueheath expands its customer base. Several contracts with forecourt operators are due to be announced, following a flurry of deals, most recently with Texaco in April.
The leisure industry is also a key target, says Gurr. Gala Bingo, Vue Cinemas (the new name for Warner Cinemas) and UGC cinemas all signed up for Blueheath’s services. “We’re interested in delivering to outlets between 500 sq ft and 3,500 sq ft,” says Gurr. “That would include railway outlets, m-way service areas and small foodservice operators. Foodservice will be a forthcoming focus for us.”
The company has also been busy developing its business with newsagents and sub-post offices after deals with the National Federation of Retail Newsagents and Postmasternet in May. The organisations agreed to promote Blueheath services to their retail members.
Joining wholesale buying group Landmark in February generated additional leads, says Gurr: “We’ve got great things out of that, such as access to a quality own label range in the form of Landmark’s Lifestyle label.” The move created a lot of supplier leads. For example, Gurr says: “In June we were invited to give a presentation at Landmark’s conference in Monte Carlo in front of 200 suppliers. Twenty one-on-one meetings came out of that.”
Raising £18.5m by launching on the Alternative Investment Market in July has instilled trust in the eyes of manufacturers, he adds. But he admits: “We’ve not been as proactive with manufacturers as we have with retailers. We already deal with most major suppliers and in fact we took 200 skus out this year, tightening our concentration on 3,500 core lines.”
In the last six months, new in-house IT has allowed manufacturers and retailers to identify bestselling lines and target sectors where they sell the most. “We’ve designed online, real-time systems giving retailers a full view of sales at each of their sites and allowing manufacturers to see who’s buying what products where.”
>>p37 Alternative Investment MarketRobert Lowe
General manager, Hyperama
Hyperama, the West Midlands-based cash and carry group that was spun out of Chinese food importer and distributor JK Foods in September 1992, reports a stable financial outlook with turnover in excess of £100m. There are plenty of initiatives in the pipeline, says Lowe: “The business is now progressing and we want to move it further forward.”
Hyperama has set up a form of retail club which involves providing retailers with display material and other forms of support. This has been a positive step and Lowe believes it has been successful as part of the group’s plan to educate retailers about range and display.
The company remains open-minded about expansion possibilities, and as Lowe states: “If the right opportunity turned up for another depot in the right location we would be able to consider it now whereas we probably wouldn’t have been able to a year ago.”James Ward
Managing director, AC Ward
Following a successful bedding in of Saxton’s delivered wholesale business, AC Ward has seen plenty of activity.
The company recruited David Ellis from Palmer & Harvey McLane/Mace eight months ago to head its symbol operation. Planning is high on the agenda, which, according to James Ward, has, “resulted in restructuring our field sales team to bring stronger focus to our symbol stores”.
This initiative coincided with the introduction of its concept store format. “This is an affordable offering for those retailers wishing to invest in their future by way of a total store redevelopment programme,” says Ward. The first of these stores will go live in November.
“Our plans are to be the leading independent wholesaler in East Anglia, London and the south east. We are well positioned to consolidate on our strong base and drive the business forward.”Raj Chatha
Managing director, European Food Brokers
Raj Chatha was the MD that last year we said was “certainly not afraid to go out on a limb”. His strategy has produced impressive results.
He launched 1Stop4, the retail club for independents, in 2001, followed by The Local, aimed at smaller independents, both of which accrued an impressive amount of members in a short space of time. Since last year he has launched a franchise scheme targeted at the 75% of its club members that are off-licence retailers, giving them the full package of promotions, fascia and more.
Chatha is confident that turning the usual c-store offering on its head with 70% booze and 30% convenience is a franchising avenue with a lot of potential.
For Whitalls Wine, its delivered wholesale arm, there are plans for three depots to add to those in Halifax, Walsall and Gateshead. Whitalls is the sole supplier to Booze Buster and Wine Cellar.
Gino Paletta Managing director, CTM
Pradip Dhamecha Chief executive, Dhamecha Cash & Carry
Peter Lowrie Managing director, Lowrie’s Cash & Carry
Steve Parfett Managing director, AG Parfett
Lee Furness Managing director, WM & HM Young
Athif Sarwar Managing director, United Wholesale
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