Delivered wholesale may be winning the battle but will it win the war?
Rumours of the imminent death of cash and carry may have been exaggerated - but the perennial speculation that delivered wholesale will one day replace cash and carry as the pre-eminent means of supply to the convenience sector persists.
Those on the delivered side appeared to be given further ammunition last October when buying group Landmark dropped the ‘Cash and Carry’ from its name to become Landmark Wholesale.
Landmark MD Martin Williams, however, dismisses the argument that delivered business could push out cash and carry as mere hype. “We have acknowledged the growth in the delivery side of our business and took the step of changing our name in recognition of this,” he says.
“However the cash and carry side is still strong and has a vibrant future, and currently our operational mix stands at 60% cash and carry, with 40% delivered.”
So what really is the long-term prognosis for cash and carry operations? Today’s Group MD Rodney Hunt admits that a number of its cash and carry members have adopted a delivered business because they felt they had to rather than through any great desire to add another string to their bow. Hunt argues that the two supply models are not necessarily an easy fit. “Some members had found that operating both a cash and carry and delivered business under the same roof can be tricky,” he says. “Often staff pickers can get in the way of retailers. It’s not ideal but these issues can be worked on.”
He adds that more cash and carry operators will make the move into delivered as and when their customers demand it.
However, he still sees an important role to play for the traditional cash and carry. “There are still great opportunities, particularly in large conurbations where there is a high density of independents,” he says. “Indeed our latest figures show cash and carry outperformed delivered wholesale last year. It still holds a strong loyalty factor with independents, especially when it comes to the good ones. Loyalty is particularly strong among ethnic retailers who retain strong links to their chosen cash and carry.”
Williams argues that traditional cash and carries can offer enormous benefits over delivered wholesalers. “The additional costs incurred through the delivered route, including fuel, vehicles, stock-pickers and sales forces, are reflected in the price and margins, giving cash and carries a better price offering,” he says, adding that price is not the only reason for the continuing strength of cash and carry. “A valuable aspect is also the role it plays socially. The trip to the cash and carry is an important time to catch up with other stores, suppliers, buyers and merchandisers. It also allows wholesalers to work with suppliers on their range with in-depot displays and merchandising,” he says.
Of course going into delivered business is not without its own problems. Running a delivered business is more expensive than running a cash and carry - a factor that has been thrown into sharp focus by rising costs such as fuel and the minimum wage.
However, for Hunt, the extra costs involved for the convenience of a delivered service are often worth paying, and when it comes to competition from delivered-to-door suppliers he says both kinds of operator will have been affected by similar cost increases.
He says: “Last year’s cost rises will have affected everyone involved in supply and logistics. There is no way any delivered operator could stick to the same charges for their customers. Prices will have to have gone up across the board. Perhaps those who have told customers about extra fuel surcharges are just more up front.”
Ultimately, Williams feels that the biggest issue for wholesalers is delivering the best service for independents. “Our attention is not on whether there is a shift from cash and carries to delivered. As long as the retailer gets his goods,the focus should always stay on helping him at his store.”
Is there still a place for the traditional cash and carry?
Graham Mcpherson
Managing director, Palmer & Harvey Mclane
“More retailers will switch from cash and carry to delivered. The benefits of delivered include access to an integrated range of services such as business advice on merchandising and product ranging, competitive promotions with PoS and consumer advertising and access to up-to-the-minute IT. This complete package gives the retailer a competitive edge and the opportunity to spend more time in-store.”
steve Parfett
Managing director, Ag Parfett & Sons
“There is certainly a future for cash and carry and the two businesses are surprisingly different. There are unrealistic cost structures out there and they cannot be sustained. Economic reality will bite, and the true choice between cash and carry and delivered in pricing will become apparent. Cash and carry will remain the cheapest form of distribution and given environmental pressures it is also an effective one.”
Alan Symonds
Managing director, T&A Symonds
“The remaining independents are becoming much more professional and have the turnover that would make it impractical to use a cash and carry. And with costs rising, it is becoming a much larger overhead. The services we offer are far more than just moving boxes. The benefits of the delivered wholesaler is that we offer a symbol option, shop fits, financial assistance and third party supply arrangements.”
Peter Blakemore
MD, Blakemore wholesale
“I don’t think you can say one form of supply is better than any other. We changed our name to Blakemore Wholesale to reflect the changing nature of our business. At the end of the day it comes down to customer requirements. Each customer needs different services and we want to offer as many as possible. We have had no problems offering cash and carry, delivered and foodservice.”
Rumours of the imminent death of cash and carry may have been exaggerated - but the perennial speculation that delivered wholesale will one day replace cash and carry as the pre-eminent means of supply to the convenience sector persists.
Those on the delivered side appeared to be given further ammunition last October when buying group Landmark dropped the ‘Cash and Carry’ from its name to become Landmark Wholesale.
Landmark MD Martin Williams, however, dismisses the argument that delivered business could push out cash and carry as mere hype. “We have acknowledged the growth in the delivery side of our business and took the step of changing our name in recognition of this,” he says.
“However the cash and carry side is still strong and has a vibrant future, and currently our operational mix stands at 60% cash and carry, with 40% delivered.”
So what really is the long-term prognosis for cash and carry operations? Today’s Group MD Rodney Hunt admits that a number of its cash and carry members have adopted a delivered business because they felt they had to rather than through any great desire to add another string to their bow. Hunt argues that the two supply models are not necessarily an easy fit. “Some members had found that operating both a cash and carry and delivered business under the same roof can be tricky,” he says. “Often staff pickers can get in the way of retailers. It’s not ideal but these issues can be worked on.”
He adds that more cash and carry operators will make the move into delivered as and when their customers demand it.
However, he still sees an important role to play for the traditional cash and carry. “There are still great opportunities, particularly in large conurbations where there is a high density of independents,” he says. “Indeed our latest figures show cash and carry outperformed delivered wholesale last year. It still holds a strong loyalty factor with independents, especially when it comes to the good ones. Loyalty is particularly strong among ethnic retailers who retain strong links to their chosen cash and carry.”
Williams argues that traditional cash and carries can offer enormous benefits over delivered wholesalers. “The additional costs incurred through the delivered route, including fuel, vehicles, stock-pickers and sales forces, are reflected in the price and margins, giving cash and carries a better price offering,” he says, adding that price is not the only reason for the continuing strength of cash and carry. “A valuable aspect is also the role it plays socially. The trip to the cash and carry is an important time to catch up with other stores, suppliers, buyers and merchandisers. It also allows wholesalers to work with suppliers on their range with in-depot displays and merchandising,” he says.
Of course going into delivered business is not without its own problems. Running a delivered business is more expensive than running a cash and carry - a factor that has been thrown into sharp focus by rising costs such as fuel and the minimum wage.
However, for Hunt, the extra costs involved for the convenience of a delivered service are often worth paying, and when it comes to competition from delivered-to-door suppliers he says both kinds of operator will have been affected by similar cost increases.
He says: “Last year’s cost rises will have affected everyone involved in supply and logistics. There is no way any delivered operator could stick to the same charges for their customers. Prices will have to have gone up across the board. Perhaps those who have told customers about extra fuel surcharges are just more up front.”
Ultimately, Williams feels that the biggest issue for wholesalers is delivering the best service for independents. “Our attention is not on whether there is a shift from cash and carries to delivered. As long as the retailer gets his goods,the focus should always stay on helping him at his store.”
Is there still a place for the traditional cash and carry?
Graham Mcpherson
Managing director, Palmer & Harvey Mclane
“More retailers will switch from cash and carry to delivered. The benefits of delivered include access to an integrated range of services such as business advice on merchandising and product ranging, competitive promotions with PoS and consumer advertising and access to up-to-the-minute IT. This complete package gives the retailer a competitive edge and the opportunity to spend more time in-store.”
steve Parfett
Managing director, Ag Parfett & Sons
“There is certainly a future for cash and carry and the two businesses are surprisingly different. There are unrealistic cost structures out there and they cannot be sustained. Economic reality will bite, and the true choice between cash and carry and delivered in pricing will become apparent. Cash and carry will remain the cheapest form of distribution and given environmental pressures it is also an effective one.”
Alan Symonds
Managing director, T&A Symonds
“The remaining independents are becoming much more professional and have the turnover that would make it impractical to use a cash and carry. And with costs rising, it is becoming a much larger overhead. The services we offer are far more than just moving boxes. The benefits of the delivered wholesaler is that we offer a symbol option, shop fits, financial assistance and third party supply arrangements.”
Peter Blakemore
MD, Blakemore wholesale
“I don’t think you can say one form of supply is better than any other. We changed our name to Blakemore Wholesale to reflect the changing nature of our business. At the end of the day it comes down to customer requirements. Each customer needs different services and we want to offer as many as possible. We have had no problems offering cash and carry, delivered and foodservice.”
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