Peter Youings talks to Better Wholesaling about his West Country family firm’s plans for the future
In the three years that Peter Youings has been chairman of Sugro, the buying group has gone from strength to strength. Not only has Sugro posted double-digit growth in a volatile market, there have been two major changes to its customer service, which he is keen to highlight.
“Sugro members can now personalise the leaflets and we allow members to look through the promotions six weeks before they start,” he says. “It means members aren’t promoting products they don’t want to stock.”
The second big change for the group has been the introduction of online ordering. “It’s working incredibly well for us. Around 300 of our 1,100 customers use it, which is nearly 25% within three months, and we haven’t actually marketed it yet.”
An ambitious relocation
Youings completed his three-year term this May to make way for Ross Gourlay, managing director of Glencrest. But finishing his tenure as chairman does not mean that he will be winding down in the industry: Youings Wholesale, based in Barnstable, is preparing for an ambitious relocation, with a new 30,000sq ft unit set to be completed within the next 12 months.
Youings says: “The priority is to get stock into areas that do not require restocking every day. We have a huge product range, but do not have space to put volume on the shelf. We want three pallet spaces at least.”
The company currently operates out of three warehouses in the same estate, so it is a challenge to load the company’s nine lorries and three vans, as well as hold the 4,000 stock-keeping units in its range.
The move to the new site will see Youings bring all its operations under one roof, including Havana Coffee, which the business purchased eight years ago and is seeing 30% growth.
“It was very fortunate that we purchased Havana Coffee when we did, as it was just on the announcement of the smoking ban in pubs and tobacco vending machines had to be hidden,” Youings says. “That killed that trade overnight and we had 200 machines out. Fortunately, this opportunity came up and we’ve now substituted the profit we lost.”
Youings and Tobacco
Tobacco is ingrained firmly in Youings’ history. In 1884, Youing’s great-grandfather opened a tobacco shop, which is still on the main street in Barnstable. Youings’ grandfather opened a purpose-built shop in the high street, which boasts four departments, a specialist tobacconist, specialist confectioners, and a toyshop and model shop, which is still run by Youings.
“There are only about tobacco stores in the whole country. With confectionery and tobacco, we know how it works and we can give that advice to our customers, so that’s quite unique,” says Youings.
This specialist knowledge is proving particularly useful with the changes to tobacco regulations that are coming into the market. “The Tobacco Products Directive II regulation is becoming very problematic already. We’re suddenly having delistings on price-marked packs. We’ve got a wider range than most but I fear we might see certain brands disappear altogether,” he explains.
But contrary to the trend, Youings has seen an unexpected spike in tobacco sales over the past six months, which has come from new business and a suspected drop in illicit trading in the area.
Competing with discounters
Having first-hand retail expertise also allows Youings to see in which areas of the market customers can compete. “We have a promotional tool called ‘Quidz In’ that allows us to compete with discounters and £1 shops, and it’s incredibly successful. You’d think £1 stores would have a serious effect on shops if they didn’t try to compete, but it’s as good as anything you’d see in Poundland, perhaps sometimes better and we try to keep margin over 20%,” he says.
Wholesale has always been a part of Youings, too. “We’ve got our takings book from the first day we opened and you can see we were selling outers of tobacco at a special price. We got into it in a bigger way when my father joined the business after the war and we were mainly involved in pubs.”
That business grew into the largest independent wholesaler in the West Country, serving customers from Weymouth to Penzance and from St Ives to the north of Bristol – a significant feat considering that 15 years ago, the business was solely in north Devon.
“Sometimes we can go 80 miles to get to our first drop, but that’s just the business we’re in,” Youings notes.
The alcohol opportunity
Having a strong history of working with pubs means that alcohol is another opportunity for Youings and he supports the new alcohol wholesaler licensing legislation. “Illicit trading has created issues, but once we have confidence in who we’re buying from, we’ll be more relaxed. We used to get emails from people offering prices that were too good to be true, but we don’t get those any more, so I’m wondering if the scheme is already working,” he explains.
Youings has stretched as far geographically as it can, but the new warehouse will open up opportunities for investing in technology, making more cost savings, and improving its value for customers. “We’ve always absorbed smaller independent companies. It works really well because these are often too small to be attractive to bigger companies, but we’re in a good position to buy. If anything crops up we’re always interested,” he says.
For a business as invested in tobacco as Youings is, the future is very challenging. But over its 132 year-long history, Youings has always managed to adapt. The new warehouse is the first step in what could be a bright future for the business.
“My family are in the business and I’ve got to give them a future while I can. I owe it to the family and the staff for it to continue so I have to bite the bullet,” he says.