Paul Hill speaks to Maurice Devlin, the managing director of Sugro member Northern Confectioners, from the company’s recently extended warehouse in Dungannon, Northern Ireland
PH: How was the business formed? MD: My dad initially ran the business in 1967 with two partners who passed away back in the 1970s and 1980s. We lived in a family house next door to the depot (where my parents still reside), so I was literally immersed in wholesale from an early age; it’s in my blood, with my mum also playing a huge role in the running of the operation over the years. There were five kids in our house and we all worked in the business at some stage growing up – evenings, weekends, school holidays etc. My sister Sharon still works in the office and I was the one who ended up taking over. My father is still involved, but I’m now in charge of the day-to- day running of the operation. When my parents moved to the house in the 1960s, they built a small warehouse and it has gradually been extended over the years. We are still the only convenience wholesaler in the town of Dungannon and the other nearest wholesalers are in Belfast or Newry, around 45-60 minutes away.
What do you stock and who do you supply to? We distribute confectionery, soft drinks, crisps, grocery, household lines and snacks all over Northern Ireland, and our range extends to more than 2,000 items. We have a diverse customer base with around 90% of this convenience stores and the remaining 10% coming from newsa- gents, garage forecourts, takeaways, pubs, cafés, schools and sports clubs, to name but a few.
Would you consider going south of the border to the Republic of Ireland? We’ve grown quite significantly over the past six or seven years and it would be good to go down, but it’s far too much paperwork and admin if you wanted to expand in relation to
tariffs and taxes at the moment, not to mention the problems DRS has also caused. The plan was to go south, but the legislation has made it extremely difficult, so the focus is on Northern Ireland for the time being.
How does the Northern Irish market work? It is a very independent, competitive market and rare for a retailer to just have one supplier. And although you have certain big players involved, much of the market is very independent and field-sales-force-based, with relationship between retailer and wholesaler playing a key role.
Read more: Sugro adds digital signage to membership offering
How did The Troubles affect the sector? The Troubles were obviously an horrific time for everyone, but because of the danger in operating over here, it kept away the big supermarkets such as Tesco and Sainsbury’s until the 1990s, allowing the smaller independ- ents to establish themselves in the market, which is why they are still so prominent to this day.
Do you have any recent developments? We completed an extension on our warehouse in January last year, and doubled warehouse space from 20,000sq ft to 40,000sq ft. It took around a year to build and because we had a hilly field out the back, we had to build it on steel bracing. We’re in a very fortunate position where we’ve had nine years of consecutive turnover growth and this warehouse will enable us to grow our turnover and product range further, with plans to take on more grocery and household lines such as sauces, cereals and pastas, which are already performing very well.
What is your USP? I believe service is our USP. We’re completely customer driven, we never let anyone down, and know the market and customers inside out, which allows us to serve them well. I also believe we have a key ability to react and adapt quickly to changes within the market and a lot of this is down to the outstanding contribution of our staff to the running of the business.
What are the biggest challenges for the industry? Increases in costs is the biggest challenge now, on things such as electricity and fuel. On top of this, more and more suppliers are going down the road of price-marked packs (PMPs) to the point where us and our retailers can’t get any more from them. Obvi- ously, some suppliers have increased their price-mark and it’s all right say- ing the cash margin has gone up, but we need the percentage margin to go up as well. Don’t get me wrong, PMPs can work very well, but at the moment we’re absorbing too much of the costs across the board in all categories.
What is the five-to-10-year plan of the business? We aim to continue growing our range and customer base. The range will prove easier as it will mainly be a case of selling new products to existing cus- tomers, which they would mainly al- ready be getting anyway from another source, so it’ll be up to us to convince them to make the transition to us once we stock it.
What has the company done to improve its green footprint? Our new warehouse is all LED lighting, and we’re also at the start of implementing a new software system, which will allow us to go paperless within a year. This is a Windows-based system, designed specifically to our requests and needs. Warehouse management and voice picking will be key components of this.
How has the company embraced digital? After implementing it over two years ago, around 40% of our business now comes through digital. You can clearly see our customers spending more when using online and a lot of this is down to my wife, Kathy, who joined the business after we got married. She was a software engineer previously and has been key to the IT development within the business – online ordering, app, as well as our warehouse management and software systems.
How has Brexit and the Northern Ireland Protocol affected the company? The government left it to wholesalers to sort ourselves out, and although Sugro was very helpful in trying to gain the information for us, we en- countered problems out of our control, such as delays in orders from some suppliers, products being delisted from the Northern Irish market, as well as supplementary declarations required for deliveries from some suppliers. There was also a lack of information from HMRC and a seeming lack of knowledge on its behalf.
