McDonald’s operates over 37,000 restaurants across the world, with its 375,000 members of staff serving an average of 68m customers each day, generating a global turnover of £19.5bn for the fast-food chain last year.
In comparison, Hull-based foodservice wholesaler Young’s Foods operates out of one site in the 2017 UK City of Culture, has around 350 ‘live’ customers catered to by 15 employees, and boasts an annual turnover of £2.5m.
Two very different businesses, but without McDonald’s, there may well never have been a Young’s Foods, which has just become the 20th member of the Fairway Foodservice buying group, a move which is set to double the 25-year-old business’s turnover in the coming years.
Young’s founder and managing director Dave Young, says: “My father ran a fish and chip shop, and there came a point when McDonald’s was starting to take off in Hull. To compete, we needed the consistency that they had. The quality of our chips in the chip shop at the time depended on the guy who was cutting them and making them. But we saw these chilled chips from the Netherlands and they were really consistent and good quality, so we started importing them for the shop instead.”
Before long, Young started selling the product under the Young’s Foods name to other chippies, too. This was the sole enterprise for the business for around 15 years, before it gradually introduced a few other products into the mix. Then, seven years ago, Young shifted the focus of the business.
He says: “The frozen manufacturers gradually bought up all the chilled chip companies, made them a bit uncompetitive, and the market went back to frozen. That’s when we knew we had to concentrate fully on foodservice.”
Young’s now stocks a wide range of products, from desserts and soft drinks to eggs and fresh produce. It sells its wares to a wide array of customers, including cafés, takeaways, pubs, schools and colleges across Yorkshire and also in Lincolnshire.
Young says stock rotation and stock levels were among the biggest challenges in turning the business into a foodservice operation: “Dealing with more products made things more difficult, so we had to upgrade the computer systems to deal with it,” he notes. “We’ve now seen a computer system that Fairway’s members have, and that would have made things a lot easier had we had that at the time.”
The business moved to its current home 10 years ago, and is now on the verge of realising the advantages of its biggest-ever investment at the site – a 3,000 sq ft extension, incorporating a 2,500 sq ft freezer.
Young says: “With the freezer, forklifts and racking, you’re talking about a £250,000 spend. We needed it to become more competitive and to carry more SKUs, especially on our core lines. We are pretty confident the extension will more than pay for itself. Ultimately, it’s vital to reinvest in the business, but in a controllable way, rather than standing still.”
The extension, in line with joining Fairway, fills Young with confidence that Young’s is set for a new phase of growth. He notes: “The next year will be about settling down, getting Fairway products in and growing from there. After that, the explosive growth will come.”
Young says the firm elected to join Fairway as he believes the quality of its own-label products is better than the ranges of other buying groups. He adds: “We met the team and they were so friendly, welcoming and helpful that we knew straight away they were the buying group for us. It’s not all about price, this industry. Quality is more important, and Fairway gives us that.”
Young’s is primarily delivered-only and operates with seven 3.5-tonne vehicles. However, Young is targeting further growth in Lincolnshire, so is looking at investing in 7.5-tonne vehicles next year to make this mission more profitable, at a time when being as efficient as can be is absolutely critical.
He says: “We’ve got to be streamlined in the business and we can do that in a range of ways. One is the early-morning loading of the vans. We have set up a VoIP (voice over internet protocol) phone system for the telesales staff to keep costs down. It’s also improved efficiency. Investing in the computer systems has helped make them more efficient, too. It’s an ongoing, evolving process.”
Other areas seeing evolution are dietary and consumption preferences, which present challenges. Young notes: “You’re seeing gluten-free coming to the fore. Four years ago, who knew what gluten-free was? Food-to-go is also seeing immense growth, so we need to offer new products competitively, to help customers compete with the likes of Greggs.”
Young eventually aims to give customers the option to order online, but he first intends to revamp the company website, which he admits needs working on. Efforts have been made to improve the company’s Twitter presence, though, and Young says this is helping raise the profile of the wholesaler.
As for the selling points unique to Young’s that underpin the bells and whistles, he says: “Service makes us stand out, and we try to give higher service levels than anybody else. As we’re smaller and nimbler, we can do the earlier and quicker deliveries. We try to be competitive on price, but given our size, flexibility is as important. It’s not a case of saying ‘you can only buy from the catalogue’, like it can be at bigger wholesalers. Being flexible gives us a unique advantage.”
Another tactic Young swears by is controlling the debtors’ book tightly: “We’ve probably got one of the lowest debtors’ book in the business percentage-wise,” he says.
The main lesson to heed from Young’s wholesale path is a simple one, though: “Building this business has all come down to hard work – nothing is handed to you on a plate, and there’s no magic formula,” he says. “The journey hasn’t been easy at all, but I’m hoping the next stage is going to be easier than the last one.”
60 Seconds with Dave Young
What’s the best bit of business advice you can offer?
Earn a pound and spend 90p. But you’ve got to reinvest. Constant reinvestment is important.
What’s your philosophy in regards to work?
The harder you work, the more successful you are.
Who’s had the biggest impact on your career?
My father. Even though he’s not involved in this business, he’s had the biggest influence on me and how I operate, after instilling in me the values of hard work, good housekeeping, honesty and reinvesting to grow.
What do you get up to in your spare time?
I’m involved in a kitchen-fitting and interior design business. That aside, rugby league. I’m a big fan and for my sins, I follow Hull Kingston Rovers home and away.