Paul Hill talks business with a wholesaler operating on both sides of the Irish border
The entire wholesale industry is set to feel the ramifications of Brexit, but you’d be hard pressed to find a company that will be affected more than O’Reilly’s Wholesale in Northern Ireland.
It operates less than 10 miles from the border in Newry and a third of the customer base stems from the Republic of Ireland. Managing director Derek O’Reilly has been proactive with his Brexit contingency planning. “We’ve already set up a company office in the south. This means we’re now prepared if it comes to a hard Brexit,” he says.
“For us, the uncertainty is related to the tariffs that might be applied. We’re hearing 30-40% applicable, which is quite high. You can plan all you want and cover all your bases, but you still don’t really know what is going to happen until after October.”
O’Reilly explains that a number of other companies in the surrounding areas have made a similar decision, with some businesses even changing locations. “Change is on the horizon and everyone needs to be ready. Suppliers have been telling me that they’re spending up to £1m getting ready for Brexit. We’ve had a great deal of being able to trade freely across the border, but that’s not going to happen now, unfortunately,” he adds.
Track and trace is another piece of recent legislation that the managing director is expecting issues from. “Suppliers such as JTI have been really helpful in aiding us and giving us more information, but we’ve not had much help from the government,” O’Reilly says.
“We’re implementing the programme so that it works with our current software supplier, Sanderson. This stops us from having to work with two separate systems. However, we’re still moving out old stock and haven’t really felt the effect yet. I imagine we’ll start using the track and trace system properly around the end of September, early October.”
Currently celebrating its 60th anniversary, O’Reilly’s trades in products across a number of categories in packaged goods, with confectionery and soft drinks each making up around a third of the lines and 10-15% coming from cigarettes. The rest is made up of health and beauty SKUs as well as a wide range of grocery items.
“Throughout the years, we started adding more food products followed by an increasing amount of household and toiletries. We don’t work in fresh and frozen,” he adds.
The Sugro member has more than 1,000 customers across all of Northern Ireland in addition to large areas of the Republic, and can lay claim to being one of the buying group’s biggest wholesalers, with a yearly turnover in excess of £30m. “We’ve built this growth up over six decades of trading and trust with our suppliers and customers.
“These relationships along with the work Sugro does for us gives us the flexibility and freedom to negotiate the deals that we feel suit our customers, giving them opportunity to increase their profits,” explains O’Reilly.
The company has also branched out into the convenience store market, with five retailers now signed up to its One 2 Shop symbol group. “We signed our first store up in 2015, before bringing three on board last year followed by one this year. Once they sign up, we look for up to 90% of loyalty from them, but don’t include fresh and frozen as we don’t sell it.”
Convenience store customers such as this make up a large part of O’Reilly’s business. Alongside forecourts and discounters, they make up 90% of all the company’s sales. “Foodservice takes up the other 10% and is a growing area for us, with restaurants, cafés and coffee shops all big buyers of our soft drinks range,” says O’Reilly.
But what sets the Newrybased wholesaler apart from its competitors? “We have a very good team in place, and, as a company, we react very quickly to trends,” he explains. “I feel that we’re in a great position in that we’re still small enough to gauge first-hand how our customers think, but big enough to be able to facilitate changes quickly.
“We’re also in a unique position compared to other Sugro members in that we don’t use CCEP but Coca-Cola Hellenic as our Coca-Cola partner. This is also the case for some other suppliers with contracts differing when you move across the Irish sea.”
With a solid reputation, a vast collection of customers and a positive mindset, O’Reilly’s Wholesale is in a great position to handle everything that Brexit throws at it. Regardless of a deal or no deal on 31 October, Derek O’Reilly should continue to oversee an upward trajectory.