Is there a need for better collaboration between suppliers, wholesalers and customers in our sector this year?
Well, if you think the answer to this question is no, stop reading now. But I think you should reconsider.
I was at a Him! conference recently and one of the startling facts I took away from the presentations was that prices in retail have fallen for 32 consecutive months.
For consumers, there is plenty of good news here. But as business people buying and selling food and drink in such a fast moving, competitive market, this isn’t great news at all for us.
This fall in shop prices has come from some of the fiercest competition we have ever witnessed, thanks to Aldi and Lidl at the bottom end of the market and Waitrose and Sainsbury’s at the top end.
The net result is that suppliers, wholesalers and retailers are all selling more products for less revenue, which reduces category values, can reduce profitability and affects all our profits.
On top of this deflationary market, we are all still faced with the continuing increasing costs of running our businesses, more punitive legislation, unseasonal weather not helping sales, and the ever-looming threat of things such as a sugar tax being introduced by the government.
The impact of the new living wage has been well documented. It will place a huge burden on many suppliers, wholesalers, retailers and caterers, leaving few opportunities to increase margins other than reducing staff or putting up prices. Surely this cannot have been the objective of those who decided the living wage?
Although I don’t smoke, I think the continued vilification of smokers beggars belief at times. Tobacco is also a category that still generates £13bn per year in taxes and duty for the government, but the sector receives little support to deal with counterfeit stock and stock on which no duty has been paid.
In my opinion, the new EU tobacco legislation outlawing packs containing fewer than 20 cigarettes is madness, as is the UK’s pursuit of plain packaging, when we already have a display ban and the removal of price-marking could do untold damage to the market.
On top of all this, we are a sector that needs great summers and poor winters to drive shoppers to local stores, and even the weather has been against us in the past year or so.
One of the few shining lights for our sector is the introduction of the Alcohol Wholesaler Registration Scheme for the selling of licensed products. This has come about thanks to some great work by the Federation of Wholesaler Distributors in campaigning for the licensing of wholesalers and retailers that sell alcohol. The scheme puts additional pressure on suppliers to only sell to legitimate outlets and squeezes out the criminal element that defrauds the duty on these products and destroys the market for legitimate wholesalers.
For our foodservice wholesalers, out-of-home eating seems to remain as resilient as ever and the industry has very successfully overcome the first stage of providing additional nutrition information to consumers, although there is more legislation to follow.
For the Landmark Wholesale Group, we remain the ‘Wholesaler of Choice’ for our suppliers and our customers. Our award-winning Lifestyle Express symbol group leads the market, with core range compliance and excellent store standards.
Our Caterer Connections Club is bringing our suppliers and our members closer together, offering our catering customers better value and more information, which helps them run better businesses.
My question at the beginning of this article was “Is there a need for better collaboration between suppliers, wholesalers and customers in our sector this year?”
Undoubtedly, the answer is yes. I would argue that collaboration is more important than ever before if we are to ensure that we remain a growing and profitable sector for suppliers, wholesalers and, most importantly of all, our customers.