Exclusive: Wholesome wholesale competition

Competition is heating up among wholesalers who in turn are resorting to every trick in the book to hook convenience retailers.

It is often said that competition is a force for good in the long run as it bolsters productivity and efficiency. In this £37.9 billion market, competition has traditionally been based on price, product range, and market reach as wholesalers strive to differentiate themselves and gain a competitive edge.

Recently, the competition has also been influenced by the rise of quick-delivery options, online platforms and e-commerce. Many wholesalers have established online platforms to expand their reach, enhance convenience, and cater to the evolving needs of their customers. Afterall, e-commerce platforms provide an additional channel to reach a wider and “next generation” customer base.

Booker still enjoys the lion’s share here, followed by another giant Bestway. Parfetts, Dhamecha, Cotswold Fayre, Hancocks, Pricecheck and JW Filshill are also some prominent names.

Apart from big ones, several small and local wholesalers have also sprouted lately, giving tough competition to the bigwigs.

Between its two depots in Grimsby and Hull, Dee Bee caters to retailers from Scarborough in the north, across to Goole and Selby in the west, the whole of North and North East Lincolnshire and further south into Lincolnshire and the East Midlands.

SOS Wholesale is said to be one of the UK’s biggest discount-delivered wholesalers while Holleys is a premium grocery distributor serving the independent retail sector. The latter claims to help retailers to maximise basket spend and increase footfall through supply of a complete range of premium ambient groceries as well as regional produce- backed up by large stocks and fast delivery.

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Premier Wholesale 247 Ltd has depots in the Midlands, Northampton, East London, Berkshire, Greater Manchester, then moving South to Romford and London, catering to thousands of independent retailers, corner shops, mini supermarkets, grocery stores and convenience stores in the Northwest.

Who is doing what?

In present times, higher prices are everyone’s pain point. Most wholesalers are elbowing to each other to emerge as the ones offering better prices through campaigns such as promo weeks and price locks.

TWC’s recent research based on 200 independent retailers highlighted that more than one in five are “shopping around more” to get better deals, a broader range, and in some cases to find stock.

Confectionery wholesaler Hancocks does not feel threatened by any competitor, vouching on its extensive network and quality offering.

“At Hancocks, we are proud to be nationwide and offer value and quality confectionery products to retailers across the country. We have 14 nationwide cash and carry stores and an online channel where customers can shop 24/7 with delivery to their door and free click and collect,” Kathryn Hague, Head of Marketing at Hancocks, told Asian Trader, adding that each depot has more than 3,500 branded and own label products.

Hague banks on offering retailer “great value” in these economically hard times.

“One way we are helping to tackle this is through offering cost-effective ranges for our customers. We have worked with suppliers to course a range of entry level price energy drinks, chocolate, sweets and crisps across great quality brands.”

To offer value to retailers, Hancocks has introduced the Ultimate Multi Buy so they can save on bulk across major brands.

Another strategy of Hancocks to gain loyalty among retailers is to maintain and expand the largest range of confectionery among wholesalers, which it do through launching NPD and stocking the largest range of pick & mix and novelty products.

“We serve our customers in ways which suit them through multiple sales channels and invest in ecommerce to make the experience as easy as possible,” informed Hague.

“The knowledge of our staff spans decades of experience in the confectionery business, helping them to build close and trusting relationships with customers to offer them the best experience possible,” Hague told Asian Trader.

Just like Hancocks, wholesaler Parfett states that it does not have “any direct competitors”.

Jamie Ferguson, head of marketing at Parfetts

Jamie Ferguson, head of marketing at Parfetts, stated that the wholesaler offers “incredible margins” across a range of regular promotions, which makes it “unique”.

“We work closely with suppliers to ensure we have high levels of availability across a wide range of key convenience lines. At the same time, because we are employee-owned, we invest more back into price and margin – so we ensure our prices across our full range are very competitive.

“We also offer regular deep dive promotions across a wide range of hundreds of products – this all means that a customer can come to Parfetts, shop a wide range of over 9,000 products and be confident that the prices they pay will be the best available. Reducing the need to shop around,” Ferguson told Asian Trader.

Bestway’s “winning formula” is to support customers and stay ahead of competition.

“Last year, it has been through delivering leading promotions, keeping supplies consistently available, and helping customers navigate extraordinary economic conditions. And yes, it’s all about price and margins but there are value-adds which we provide here at Bestway, which have seen massive investment and have set the bar high for any competitor to follow,” says Managing Director of Bestway Wholesale, Dawood Pervez.

With its 57 depots across the country, accommodating a total selling space of just under 6 million square feet (that’s the equivalent of 89 football stadiums), Pervez has promised that the year ahead will see Bestway continuing to invest in forward reserves of stock to counter forward inevitable price increases from suppliers.

Bestway has also launched WhatsApp for Business, for all customer types ensuring retailers receive up-to-the-minute promotion and pricing information. Bestway’s delivery service is also on the rise as its Vans Direct has delivered another phenomenal year with 7 per cent year-on-year customer growth.

Bestway Vans Direct, is a part of the Bestway Wholesale family and is a syndicated salesforce that operates in the Crisps, Snacks and Biscuit category as well as in the confectionery category. Bestway Vans supplies to over 21,000 independent retailers every working day of the year, placing more than 25,000 pieces of point-of-sale equipment each year.

Delivery gained a huge popularity during pandemic and the momentum gained is still present.

To gain edge on the delivery front, Booker has recently joined hand with Just Eat to offer rapid delivery to thousands of Symbol group convenience stores across the country. As a result of this partnership, Londis, Premier, Budgens and Family Shopper will be able to offer their customers a range of fresh food, everyday essentials, drinks and tobacco delivered to the door, within 25 minutes.

JW Filshill's distribution centre

JW Filshill, on the other hand, is said to be targeting social-media-savvy retailers to expand its KeyStore symbol group. It is also focused on maintaining its delivery service. The wholesaler reportedly has developed separate picking zones to speed up the delivery process while at its distribution centre, specialised shelving has been designed to move popular lines at a faster rate.

In November, Dhamecha Group stepped out of London and acquired two depots at Nottingham and West Bromwich from Hyperama Foods. Its arrival in the Midlands is said to have created a shift in dynamics for Parfetts and Bestway.

A retailer told Asian Trader how after the arrival of Dhamecha, Parfetts and Bestway has improved on their delivery services to compete with the new player in the market.

What is Needed?

TWC Development Director Tom Fender feels that discounts and schemes can work but only for short term.

“Apart from costing and discounts, it is the customer service that trumps when it comes to gaining loyal retailers,” Fender told Asian Trader.

Tom Fender

A retailer won’t necessarily go back to a particular wholesaler just for discounts but if someone offers them a complete package- data, trends, new launches, exclusive products, and good quality own-label range- the retailer would like to stick that particular firm, he said.

“Organising event-wise campaign is a great idea to create buzz and momentum. There are many events spread in the coming months and if wholesalers can tap those, it can give a great leverage to both wholesalers and local stores,” he said.

Like Bestway Wholesale’s King’s Coronation Campaign during which retailers were offered some market leading promotions and products at the best prices. Bestway also ran a series of competitions over this four-week campaign period, including five prizes to win £1000 depot credit.

Bestway Retail Showcase 2023, that happened on May 25, saw a record numbers of retailers and supply partners alongside its specialist retail teams.

"More than 140 supply partners engaged with retailers, sharing market insights and product opportunities, inviting retailers to feedback on NPD lines they are looking to bring to market. There were over 100 special Retail Showcase offers extended to attendees on the day, giving powerful opportunities to make more margin and capitalise on sales opportunities," stated Bestway.

Bestway Retail Showcase

Offering new and exclusive line of products is also picking up. Recently seen in the case of PRIME energy drinks, which is currently a huge fad, so the race is on among retailers to stock this product in all flavours.

“By offering such popular and trendy products, wholesalers can surely attract retailers who are already facing a huge demand of such products from shoppers anyway,” Fender said.

Fender also suggested wholesalers to negotiate hard with suppliers for better margin for the retailers.

“Reducing margins has been one of the easiest way to not to pass on the price increase to customers and hence face push back by them. If a wholesaler can offer better margin to its retailer, that can work as a game-changer for everyone,” said Fender.

Wholesale experts and former Director of Communications at Federation of Wholesale Distributors (FWD) David Wisick adviced wholesalers to do the basics well.

“Stock the products the retailers need before they even know they need them, and be fair and clear on ROI,” Wisick said.

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Like the rest of the world, digital is the way forward in this sector too. Wholesalers' digital offer will evolve to match the experience their customers get as consumers.

“We're all used to the way advanced consumer interfaces learn from our ordering patterns and make intelligent suggestions. That kind of platform is becoming more available to businesses in our sector and it's the logical next step for forward-thinking wholesalers,” Wisick told Asian Trader.

Looking Ahead

Lyndsey Cambridge, Head of Engagement & Communication at FWD, predicts the drop in wholesale delivered services.

“With fuel cost rising through the roof, offering delivery solution is proving to be less cost-effective for wholesalers. I feel that in the next 12-18 months, wholesalers will strive and take active steps to bring retailers back to the depot by giving them better experience and expert support,” she said.

Offering good quality own-label range can prove to be a trump card for wholesalers.

“Retailers are looking at stocking cheaper products owing to customer demand of the same. Wholesalers are trying to expand this range so as to retain more retailers who in turn are looking for good quality cheaper yet products with better margins,” Cambridge told Asian Trader.

Fender also vouches on own-label range as a win-win solution for everyone. Overall, he stressed that “better customer service armed with expert knowledge and not just special discounts, can take a wholesaler far ahead in this market”.

Wholesale sector has moved with time and has been highly resilient, stated Fender, who adviced every player in this sector to remain optimistic and keep a positive outlook.

“In present times, one should not get discouraged by the highly-publicised cost-of-living crisis. Times are tough indeed but as a wholesaler as well as a retailer, one just needs to arm well and push through a little harder,” he concluded.