Wholesaling in 2013 will be driven by customer focus

Patrick Mitchell-Fox, senior analyst for the grocery think tank IGD, considers the trends and opportunities for wholesalers in the year ahead

‘Don’t worry, it’s not about to disappear – if wholesaling didn’t exist we’d have to invent it.’ This was the response from a leading industry figure at the annual IGD Wholesaling Conference, when I asked him about his outlook for the future of the channel. And how right he was!

As food and grocery researchers, we at IGD like to put a figure on everything and we valued the wholesaling grocery and foodservice market at £27.2bn in 2012. And we forecast it to be worth £31bn by 2017, which means a solid annual average
growth rate of 2.6%.

We’ve seen the pace of sector development quicken significantly in recent years. One trend that stands out for me is now, more than ever, we see wholesaling driven by customer focus.

Rather than just ‘shifting boxes’ wholesalers are seeking to engage ever more closely with their customers to offer dynamic leadership to independent trade sectors in retailing and catering.

They now offer proactive customer support with solutions to drive trade, such as consumer promotions, while helping with commercial challenges – including financial support with store conversion.

The drive to focus on customer needs has of course been intensified by the challenging economic conditions. In an era where wholesaler survival depends absolutely on customer survival, meeting customer needs is paramount.

The transformation of the sector also been driven by the leadership of the national players, epitomised by the reinvention of Booker under Charles Wilson.

Booker has upped the ante in symbol group recruitment, offering retailers many key elements of support free of charge, while spearheading the development of online ordering to provide greater convenience and ease of access.
Digital RevolutionLaunching digital platforms isn’t just the preserve of national players. Despite their more limited resources, smaller wholesale operators such as Filshill and Wholesale Grocers have also done so.

Technologies such as online ordering have the potential to be great levellers in the sector, enabling smaller players to compete on more equal terms with bigger ones. An online presence can offer all wholesalers an equal voice with customers irrespective of size. JJ Foodservice is a real pioneer in the sector.

It has demonstrated the scope for new technologies to drive efficiency right across its business and deliver customer benefits.

While the widespread popularity of smartphones is now actively being exploited by companies likes of Dhamecha, with its app to constantly update customers on promotions and offers.

And with chilled and fresh playing more of a prominent role for convenience stores, wholesalers are increasingly improving this area of merchandise – whereas traditionally they shied away from this.

Many have sought to progressively build solutions, the best developed being those delivered wholesalers such as Londis and SPAR dedicated to distributing to well-established symbol groups.

Though latterly, Booker and Bestway have also invested increasingly in their capabilities to supply in chilled and fresh.

Although other wholesalers may lack the scale of these national players to make such investments, there is an expanding role for the buying groups.

Increasingly recruiting from players in both foodservice alongside retail, they now contain greater levels of capability in chilled and fresh handling and offer scope to pool expertise to develop chilled across the sector.

So plenty of opportunities for wholesalers and there’s no doubt 2013 will once again see the sector dispelling any myths of its conservative (with a small ‘c’) culture. Rest assured that with the dynamism and adaptability on display there will be in no danger of having to invent wholesaling in 2013 – as it continues to vigorously re-invent itself.


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