Growth year-on-year: 4.4%
Type of operation: Cash & carry, delivered
W Wing Yip & Brothers Trading Group may be a long way from the biggest wholesaler in The Grocer's Big 30. But the Birmingham-based Chinese food specialist is arguably the most successful.
In the past 12 months alone, it has climbed four places from 30th to 26th position. With an impressive profit margin of 6.6%, it not only puts its fellow wholesalers 1.8% average to shame but also manages to outshine Tesco's 5.7%. Not bad for a company set up in 1970, just 10 years after its founder Wing Yip stepped off a boat from Hong Kong with no money in his pocket. So what is it that Wing Yip is getting so right?
Much of its success comes from the unique nature of the business, believes finance and IT director Chris Torbe.
As a wholesaler of authentic Oriental food, Wing Yip has carved out a real niche for itself. Other cash & carry operators and foodservice companies on the Big 30 list may offer Asian food ranges, but not on the same scale as the 2,500 lines Wing Yip offers at its stores in Birmingham, Manchester, Cricklewood and Croydon.
Another USP is the way it uses its stores to anchor mixed-use schemes that create a sort of hub for the local Chinese community. Cricklewood is case in point. The 64,000 sq ft store was refurbished last year, but a 20,000 sq ft office development, China House, is now being added to the scheme, which will be completed this month.
By offering office space to other Chinese businesses, Wing Yip has fostered strong links with local Chinese businesses, many of which will be owned by or know Wing Yip's customers, creating a virtuous circle of loyalty and growth. Its sourcing policy is another strength, says Torbe. By sourcing the majority of products directly from the Far East, Wing Yip not only gives its customers what they want, he says, but also helps keep costs down. Also key to the group's success is tight control of overheads, particularly staffing levels, says Torbe.
Wing Yip has also benefited from a bit of good fortune. The weak US dollar has helped it boost its spending power - and profits this year. Its pre-tax profit rocketed by 60% to £5.6m on sales up 4.4% to £84.9m in year to December 2007, while its gross profit margin increased from 23.7% to 25%.
“All our stores are recording sales growth higher than last year,” adds Torbe. “The newly developed Cricklewood store is leading the way with double-digit growth.”
This is not to say that the business is blasé about global food price inflation. “The current climate is challenging, with price increases on a wide range of products and fragile consumer confidence,” admits Torbe.
But he remains confident that the foundations are in place to really grow the business this year. One area Wing Yip is particularly focusing on is online sales, which Torbe believes will grow significantly as the business improves service to the customers who don't have access to its stores. The company offers 850 ambient products online and its revamped website, which is easier to navigate, aims to promote a better understanding of Asian food, with recipes created by the company's development chef, Chef Lin.
The business is also seeking further sites. A fifth site has been identified in Nottingham and development is set to begin later this month. It has also purchased a sixth site in Cardiff. After these two sites are up and running, chairman Wing Yip wants to open a new store every two to three years. As more than 85% of its business is with foodservice customers, it is targeting cities with a population of more than a million on the basis these are likely to have a high density of restaurants.
However big Wing Yip gets, a sense of community and family will always remain at the heart of its business. “We do not want to over-extend our resources by trying to grow too quickly,” says Yip. “Through our traditional principles combined with an innovative approach, we will continue to lead the way in providing quality Chinese and ethnic foods.”
The smart money is on an equally impressive rise up the Big 30 rankings next year.