Mark Twain once said that it is not the size of the dog in the fight, but the size of the fight in the dog that matters.
On that front, SK Food & Drinks is one heck of a dog in the UK grocery wholesale scene. Its turnover might pale into comparison with others’, but SK is working on a proposition that will make it stand out from the crowd by using more modern ways of reaching customers.
The firm, a member of the Today’s Group, is based just outside central Birmingham in Gravelly Hill – an area known to most drivers for the infamous Spaghetti Junction.
It moved there in August, after previously trading in nearby Digbeth, and general manager Telly Sarai says this has affected business positively: “We had a really successful period of trade towards the end of the year – most businesses will tell you it was at or marginally up on last year, but we had a stonking November,” he declares.
Despite having “some very tough competitors out there”, Sarai says SK achieves successes like this by thinking outside the box, particularly with social media, where the company has a very strong and active presence, and targeted promotions.
Sarai adds: “In building the new site, we worked closely with key suppliers, and they have a strong presence in the depot. Our African/West Indian section is also one of the biggest outside London. There are lots of Asian specialists in this area. Loads of wholesalers dibble-dabble in it. But we have the biggest range to support the African/Caribbean sector. Lots of Jamaican clubs, for example, serve food, so we support them in that.
“To support our on-trade customers, we offer 30 different flavours of Sambuca. Others have a lot of facings of a few products, but they do not have this kind of depth to their range, and it is a point of difference that helps give our customers their own points of difference. It helps us compete with the likes of Matthew Clark.”
SK’s customer base is split 60:40 between retailer and on-trade customers, and the business wants to strengthen its relationships with its retail customers through its retail club.
“The danger is that people go to different companies’ trade days, so we want to reward loyalty and supply an after-service. To help achieve that, we have recently hired two business development managers (BDMs),” Sarai says.
Having people interacting with people rather than adopting a “computer says no” mindset is key for Sarai, with SK making it a fundamental principle in the way every staff member operates. “My office looks out onto the cash & carry – I want to be in the thick of it, so that I can understand our customers,” he says.
“A lot of companies have gone towards automation, but my customers tell me they come here as it is a person-focused environment. Our staff greet every customer when they enter and really look after them. That service goes a long way – most places don’t engage the customers like that and the only interaction they have is with whoever is on the checkout.”
SK – which has a fleet of five vehicles for deliveries – serves customers from around the Midlands and Staffordshire, helped by the fact that Birmingham is a “hotbed of activity”.
Building and cultivating customer relationships has been a career-long focus for Sarai, a charismatic and enthusiastic wholesaler who spent more than two decades working for Better Wholesaling’s December wholesaler under the spotlight, Hyperama. He says this ensured that some customers followed him when he moved from Hyperama to SK.
The SK initials stand for the names of the business’ founders, Sandhar and Kang. It began life as a cash & carry in 1974 – reportedly one of the first cash & carries to open in the Birmingham area, after Batleys. The duo then sold the business to its current owners – Gurinder Gill and Ajminder Singh – in 2011.
Sarai says the business is aiming for 15% growth in the 2016-17 financial year, and that the work put in towards achieving this goal to date means that SK is on course.
Opportunities and challenges abound in equal measure. Sarai notes: “The biggest challenge is Tesco Express. Tesco is also pushing ahead with its One Stop mission and independent retailers are seeing their margins being squeezed.
“Our customers have got to be the first choice out there to survive. Thankfully, Today’s membership helps us give them competitive pricing.
“As well as that, the discounters are a huge threat, too. They have hit a lot of our retailers hard. One Aldi or Lidl store opening in a large neighbourhood affects at least five or six smaller grocery stores.
“Retailers have got to be disciplined and compliant if they are to succeed in such circumstances. And they have got to have the right offering – that is so important.”
Developing the on-trade side of the business will be a key task this year, too. Sarai says: “On-trade is a massive opportunity. Matthew Clark and the big brewers had the market to themselves for a long time, but now businesses have the option to pop to their local cash & carry and pay a small fee for delivery.
“We have a retail development team, but the next job is to get someone who is responsible for the on-trade side. We have to get out there and meet the influencers. The on-trade market has consolidated so much, but there will be opportunities for good operators to grow.”
In five years’ time, Sarai thinks that SK’s business will be split 40:60 between retail and the on-trade. It will be gratifying to see such a progressive business – which boasts an all-female buying team and whose two BDMs are both women – continuing to thrive.