With the nation turning away from the multiples in favour of local operators, now is the age of the wholesaler, says Tom Gittins.
As Bob Dylan wrote some 50 years ago, ‘The times they are a changin’…’
The City has confirmed what wholesalers have known for some time – the nation has fallen out of love with the multiples and instead wants to buy when convenient. That means the retail landscape has swung back firmly in favour of the wholesale sector.
In the same vein, the rise in the importance of the provenance of our food is seeing the national chains of eateries struggling to compete with local operators. This creates a big opportunity for the local wholesaler, which can deliver local knowledge and service that the national concerns can’t.
‘Don’t criticise what you can’t understand, the old road is rapidly agein’
Now, it is small local wholesalers that are driving growth at the grass roots level, with their ability to react to rapidly changing consumer demands, while the bigger players implement ideas that take years to gain funding and approval as they are passed up through the corporate chain. While the big national cash & carries get into low-margin contract catering and the national foodservice wholesalers dabble in cash & carry, the local wholesalers are quietly building their businesses.
However, the difference is that national ‘consciousness’ is on their side, wanting to support a business with locally sourced food, low food mileage and a sustainable link to its local community.
‘You’d better start swimming or you’ll sink like a stone’
There have been some positive signs from some of the wholesale sector’s big players, with green initiatives and regional food programmes being put in place. But these large companies need to do more to embrace the changing attitudes of the consumer. It is the smaller operators, driven by a will to survive, that have always been better at communicating with their customers, as they cannot compete on the same economies of scale as the national operators. So for a local wholesaler it has never been about price but service and a differentiated product offering.
‘He who gets hurt will be he who has stalled’
Interestingly, if you look at the technological advances within wholesale, it is the small and medium-sized businesses that are quicker to integrate these into their businesses. It is the small local wholesaler that is investing more money (as a percentage of turnover), time and resources into e-commerce, social media and e-marketing, as these media are cost-effective while putting them on a level playing field with the big guns.
It is this investment that is also helping them to grow ahead of the market. This may well be due to their affordability compared with more traditional sales methods, but it still rings true that going forward, these businesses will be ahead of their competitors. This is the way customers want to live, buy, eat and drink.
‘The slow one now will later be fast, the first one now will later be last, the order is rapidly fadin’
Ol’ Bob, he knew a thing or two about wholesale!