Palmer and Harvey has made a pitch for the business of smaller shops with the launch of a retail club exclusively for CTNs.
P&H believes the retail club, which has been in development for 18 months, could give members an extra £3.5k profit per year. Nearly 70 stores have signed up to the scheme, following successful trials in Coventry and Haydock in Merseyside, and the number of members is expected to reach 400 by the end of the year, according to managing director Martyn Ward.
CTN retail club fast facts
- Free support: The scheme is free to join and gives retailers exclusive discounts and promotions, free consumer leaflets and category management advice on news and magazines.
- Minimum drop: Retailers need to order 40 outers of non-tobacco products per week from Palmer and Harvey.
- Successful trials: Almost 70 stores have signed up, following successful trials in Coventry and Haydock, Merseyside. Palmer and Harvey has a target of 400 members by the end of 2014.
“All the support on offer has tried to drive small retailers towards convenience,” he says.
“But there is a huge opportunity for local stores to be very successful in key categories, such as tobacco and news.”
The scheme is free to join and gives retailers exclusive discounts and promotions, free consumer leaflets, and category management advice on news and magazines. To qualify, retailers need to order 40 outers of non-tobacco products per week from Palmer and Harvey.
“We are offering support for retailers that can’t or won’t join a symbol group, and those that through no fault of their own are given little support by suppliers,” said Ward.
“Typically, supplier salesforces cover the top end of the independent retail sector. This scheme is for those that drop below the radar.”
While the club is aimed at non-symbol retailers, the move comes hot on the heels of Nisa’s adapted symbol store model, which also targets smaller shops.
Nisa chief executive Neil Turton says: “You have to start working with people who have smaller stores. Some will always be smaller stores because of their location. And it’s the nature of the market that there are fewer stores around so we have to adapt.”
Peter Blakemore, managing director of Spar wholesaler AF Blakemore (see pages 8-9), has suggested the future of wholesale will be about picking where you’re going to be in the future and simply doing it better – an improvement in standards “away from ‘one size fits all’”.
Could the new retail club be an example of this kind of specialisation? It would certainly make sense. In 2012, Better Wholesaling interviewed James Russell, a commercial director at Rowan International, a specialist wholesaler supplying independent discount retailers. He said there was a big opportunity for wholesalers to help retailers connect more with their communities – particularly the “core of retailers being left behind”.
Philip Jenkins, managing director of Sugro, says it is interesting that P&H has “caught up” to the CTN opportunity, but warns that the retail club will live or die by its minimum drop size.
“If a wholesaler has a minimum drop size of 40 outers, how does that work for CTNs?”
However, Jenkins also points out that 15,000 unaffiliated independent stores is a “great big market” at which to aim and that most have already had plenty of time to join a symbol group.
He added: “We’ve had so much success because we provide them with promotions while making sure they follow them through.”