Wholesalers are facing a tough time and WH & HM Young, ranked 21 on The Grocer's Big 30 list, is no exception. But at least MD Lee Furness has been able to vent his spleen recently in his submission to the Competition Commission's inquiry into the grocery market.

“We've just passed our comments, along with those of the rest of the industry, on to the FWD (Federation of Wholesale Distributors). There are lots of issues with the supermarkets.”

He says the key issue for his business is the supermarkets' increased involvement in the convenience sector. “And it's not just convenience stores but also petrol forecourts and every area. Tesco is into everything.”

This has raised standards to the point where customers now expect them to be replicated by all the players in the market, says Furness. And this has not necessarily been the case with some independents.

To address this matter he has been placing great emphasis on helping his customers raise their standards in order that they are better able to compete with the major multiples.

Part of this involves improving the fit-out of their stores and to this end WH & HM Young set up a shop-fitting business two years ago: “This helps raise standards and is growing at a rapid rate. Although it is still only a small part of our overall business there has been a big take-up.”

A much greater part of its business is its supply of goods to the Key Store symbol group of buying organisation Key Lekkerland - of which WH & HM Young is a member.

Although this business generates a decent portion of WH & HM Young's total annual sales of £125 million, the company is looking to drive further growth through these outlets with the help of recent recruit Laurie McLeown, who heads up its symbol business. He was brought in from Londis where he was a regional director.

The company has a variety of customers within different fields including schools, universities and the leisure industry but it is within the convenience stores arena that its main business is derived so the health of symbol groups is important to its success.

Thankfully for Furness he says one of the positive aspects of the industry is the trend for many regional independents - with between five and 20 stores - to move into the symbol groups. “The whole [independent] market is going to symbol groups. We are involved with pushing people down the symbol route so that they can compete better,” he explains.

Another strand to the WH & HM Young business is its forecourt symbol Petrol Express but again this is pretty competitive. So much so that one of the company's key customers Fuelforce was bought out and its outlets sold off, with some sites converted for other uses and a number acquired by Somerfield.

Despite this being a “£20m client”, and its demise undoubtedly dealing a blow to WH & HM Young, Furness remains confident: “We're managing, and apart from Fuelforce - which was no fault of our own - we have kept driving forward for the past 10 years.”

This has involved the purchase of AR Daunt in May 2003 from wholesaler BWG that added £40m of sales to WH & HM Young. Furness believes that such consolidation will remain a feature of the sector. “There has been a lot of consolidation and there will be more. There are lots of smaller players out there that are finding it hard,” he explains.

As well as the supermarkets providing tough competition he says the industry is also dealing with an array of other issues. These include increasing costs related to the likes of the minimum wage and the continued rise of the price of fuel.

In addition, Furness says WH & HM Young has had problems with recruiting drivers for its fleet of trucks that operate out of the group's main depot in Leeds or its trunking depot in Nottingham. This problem has abated recently and the business has enjoyed some “stability” with its fleet workforce of 40 drivers.

Now all Furness needs is some stability to finally envelop the convenience sector.

Number of depots: 2
Turnover: £125m
Growth year-on-year: -7%
Type of operation: Delivered wholesaler