Wholesalers, suppliers and service providers gathered at the Asia Gardens Hotel & Thai Spa in Alicante, Spain, for the Landmark Wholesale Conference 2018.
Landmark managing director John Mills took charge of his first conference at the helm of the buying group, inspiring the audience with a brief look at NASA’s successful New Horizons mission to Pluto, the furthest known planet in the solar system.
‘New horizons’ was the theme of the conference, with Mills urging delegates to inject vision, ambition and investment into their businesses in order to get there, but to balance that with patience.
Mills pointed to 16 major high-street retailers having gone under or being on the verge of doing so in the last 12 months, with 13,500 employees affected – and that is before you even look at the changing landscape in FMCG retail, with other supermarkets having uncertain futures due to deals such as the proposed Sainsbury’s/Asda tie-up, he suggested.
Mills also stated his belief that Tesco/Booker is “clearly going for our slice of the pie” after rolling out plans to introduce branches of Booker’s catering wholesaler, Chef Central, at Tesco Extra stores.
After referencing the recent development of the Fairway Foodservice buying group becoming part of Landmark, Mills noted: “We are in a fight, and we have got to make it work. Consolidation is inevitable and we will be at the forefront of that.”
Issuing a salvo, Mills urged delegates to help their convenience store customers perform better when it comes to food-to-go. “They have a 13% share of this market, but it should be 20%,” he said. “How the hell did we allow Boots and WHSmith to steal a march?”
Fighting talk
The fighting talk was continued by the buying group’s senior trading controller, Jim Brown.
Discussing the supermarkets’ power plays, Brown acknowledged that wholesalers have “huge competitors with huge buying power”, but he suggested that a combination of board pressures, top-heavy management structures and enormous complexity means that life remains tough for decision-makers in those environments.
However, looking at the sector, Brown said what holds the wholesale channel back
is “the process of ‘financialisation’ – accountants taking over the sales function and
an obsession with return on investment”. He urged delegates to move away from this thinking.
As for suppliers, Brown shared his concerns with some of the practices that have crept into the channel. “Please stop focusing on point-of-sale and display compliance,” he said. “We need close, collaborative relationships built on trust.”
He added: “Why are your busy sales people no longer willing to bust a gut to get an extra case in our depots? The accounts function is being outsourced. Please make sure your colleagues work with us, not against us.”
Rallying on a cause close to most wholesalers’ hearts, Brown urged suppliers gathered in the room to offer fair shared margin on pricemarked packs (PMPs). He called for fair notice periods when changes are made, but also argued that the “recent tsunami of increases will need to be stopped or reserved”. He added: “We hear a lot of chest-beating about synergies when it comes to the mults, but we need to be kept as strong. Why not give them the price increase? Do not treat wholesale as a soft touch.”
Golden opportunity
The conference heard from Parfetts’ head of customer development & marketing, Guy Swindell, and head of operations, Jason Barnard. Across its six depots in the north of England, turnover, excluding cigarettes, is forecast to hit £350m this year. In addition, a survey found that 68% of its customers actively promote the business without a prompt – figures that companies such as tech giant Apple achieve.
But a few years ago, things were not this rosy. Barnard helped oversee an overhaul of the way the business worked, starting with new teams being selected, each with a set structure, and deployed at the business’ depots.
Rear offices were removed across the sites, and customer contact points on the sales floor where key players can all communicate on a day-to-day basis, internally and externally, were created.
Barnard and Swindell have both supported the growth and expansion of Parfetts’ Gold scheme (Go Local). This has turned Parfetts’ Sheffield site into a 24-hour hub: a cash & carry in the daytime, with a picking operation taking place overnight. It has helped attract customers outside the catchment area. Such is the success of the scheme, the business is rolling it out to a second depot – Somercotes, near Mansfield – this month.
Also presenting at the event was Richard Harman, head of foodservice at Blakemore.
Paraphrasing former US president Theodore Roosevelt, he said that the business has looked at its delivered strategy from the point of view that doing nothing is even worse than doing the wrong thing.
“We recognised the need to do something,” he said. “So, we realigned the foodservice proposition. We have great people, offer great service and are extremely flexible to customer needs, and that is vital. We no longer want to be the wheels for our larger customers. We want to add value to existing customers and assist them to grow.”
Blakemore’s foodservice division is entering new market segments, such as export, wholesale accounts and vending. “We want to work with suppliers that recognise where we are heading; who will support us in getting there,” he said. “The market needs strong foodservice players outside the top two.”
Day two saw Women in Wholesale initiative founder Elit Rowland discuss the need for gender diversity in the workplace (more of which can be found on p4), followed by East End Foods’ chairman Tony Deep Wouhra talking through his business’ mission to create “purity in food”, and cut down on pesticide usage.
There followed a panel session including the likes of Hyperama director Marcus Singh and the chief executive of the Federation of Wholesale Distributors, James Bielby.
Bielby said that wholesalers had been operating in the “biggest period of uncertainty that we have ever had”, referencing the Brexit referendum vote, and his belief that we have both a weak government and a weak opposition in the House of Commons.
Talk turned to PMPs. Singh noted: “The danger is that we will see a situation where retailers and wholesalers begin to move away from them. It is vital that suppliers recognise all the other costs that are impacting on our businesses. Particularly those categories that are dominated by PMPs – they will become unprofitable if we are not careful.”
Bielby finished with a message for wholesalers: “Access to data is the number one thing that will unlock supplier investment in this channel,” he said.
While day one culminated in a motivational presentation by entrepreneur and former Dragons’ Den winner Levi Roots, day two was rounded off with a presentation by journalist and broadcaster Andrew Neil, who discussed the challenges of and failings in the political system that are impacting upon both suppliers and wholesalers.
This emphasised the necessity of strengthening working relationships in the channel, and the need to explore new horizons in order to prosper.
