Booker’s new chief Hans Kristian Hustad knows he has his work cut out to generate growth and win back lost customers.
He talks frankly to Liz Hamson
There are also serious operational challenges. One bugbear for customers is poor availability. This February, Booker was hauled in front of advertising watchdogs for a second time in a year for distributing leaflets plugging deals on products that weren’t in stock.
Hustad concedes: “Service levels are 97.5% on key lines. This is not good enough. Our customer is only interested in one thing: whether it’s on the shelves. We are laying off every kind of activity and function not contributing to success on the floor.”
Hans Kristian Hustad wanders down the confectionery aisle at Booker’s Northampton branch and casts a disparaging eye over the signage.“We don’t signpost the aisles properly,” he says bluntly. “The feedback from customers is that it is difficult to navigate the racks. We need to look at things as a retailer would.”
Such candour is typical of the Norwegian who was appointed chairman of Booker and Woodward Foodservice when Icelandic group Baugur bought Big Food Group. Forced to assume the additional role of chief executive when Bill Grimsey unexpectedly declined the job, he admits the situation is not ideal. But, he says in one of his first interviews with the UK press, he is learning to juggle his new responsibilities with home life in Oslo - he commutes weekly to Wellingborough - and getting to grips with the task in hand.
Iceland and Booker, which BFG seemed to sideline as it grappled with the more serious problems at Iceland, were formally separated on February 11. Almost two months on, the straight-talking Norwegian is still slashing through the red tape that bound them. “The group functions meant a lot of bureaucracy. Everything needs to be simplified.”
Unfortunately, that includes the workforce, which was told this week that 82 of the 440 head office staff were being laid off. Some of the cuts are the result of abandoning group functions, says Hustad. But, he adds frankly: “It is a tough market. We are fighting against last year’s negative figures. We have to work hard to generate more growth. People are aware that something needed to be done.”
The remaining workforce will be split into three customer teams, one covering retailers and impulse channels, one caterers and one tobacco and alcohol. Marketing director Mark Collier says: “The new customer-focused teams should be quicker and faster. We’re now going to become leaner.”
Hustad adds that the move will be mitigated by an increase in its sales force by at least 27 - focused primarily on its catering customer base. “We have lost customers,” he reasons. “To get them back we need people to knock on doors.”
The wholesaler, which remains the biggest cash and carry in the UK with 173 depots, has not offered the level of service to its 100,000 retail and 300,000 catering customers it should have, admits Hustad. “I have to apologise for the way we have treated the customer. There are two issues: we had reduced the number of distribution centres to four, causing availability problems, and there were problems with the sales-based ordering system.”
Part of his challenge is to instil a different ethos at the business.“We have to look at Booker from a proper retail perspective. Their attitude is that it is about the customer and that is what we have to do. I am using all my time trying to understand the problem. We have to focus. We have to justify the assortments and make sure items are on the shelf. Otherwise, we’ll turn customers away.”
Availability on faster-moving goods has already improved, says Collier, adding that the team is now working on secondary lines.
Another issue has been range and assortment. Hustad makes no bones of the fact that he wants to see Booker sharpen up its category management. The business is also extending its 200 to 300 SKU range of chilled and frozen lines, which at the moment are focused primarily on caterers’ needs, to include more products aimed at its retail customers. “It’s our intention to have a stronger fresh frozen and chilled offer and give our customers a professional delivery service on these lines,” says Hustad.
“Tesco is a threat for everybody. Our answer is to take as much care of our independent retailers as possible.”
Meanwhile it continues to aggressively expand Premier, now the fastest-growing independent symbol group in the country. And on the catering side, the Booker Express delivery service is being rolled out to a further 100 branches following a trial in 50 branches.“We’re now capable of being the number one top-up for caterers,” boasts Hustad. “As retailers, we want to support them in a more professional way.”
Hustad promises caterers and retailers can expect to see a very different business emerge over the coming months. He points to the introduction of a new management information platform that allows larger customers to open single accounts and shop in multiple branches, making Booker the first C&C to offer customers national accounts.
There will also be a greater effort to customise products to the needs of individual members, he says. “If customers want lines that are unique to them, we should aim to supply them.” Hustad is even looking at ways to leverage Baugur’s relationship with co-Big Food Group investors HBOS and West Coast Capital to offer customers financial services.
But one of the biggest changes in the pipeline is an overhaul of the delivered side of the business. At the moment, deliveries are made from the cash and carries, with the exception of those served by the Wolverhampton local delivery centre, which handles deliveries on their behalf. The plan is to have six to 10 large LDCs such as Wolverhampton nationally.
There may be some rationalisation involved, but he denies rumours that 40 branches face the axe. The emphasis will be on making the existing network work more efficiently, he says, highlighting plans to utilise some of the vacant space in its super depots. There are no plans to offload Woodward Foodservice, he insists.
With the HO shake-up now under way, life at Booker is proving something of a baptism by fire for the Norwegian, who says that the only thing he misses in the UK apart from his family is cross-country skiing.
Next year, a new chief executive is likely to be in place. By then, Hustad hopes to see a Booker that is leaner but not meaner. “I don’t like sitting in a chair all day,” he says. “My intention is to have spent as much time talking and listening to people as possible. A year from now, I think customers will say the business is more customer-orientated and that they’ve seen an improvement.”
He talks frankly to Liz Hamson
There are also serious operational challenges. One bugbear for customers is poor availability. This February, Booker was hauled in front of advertising watchdogs for a second time in a year for distributing leaflets plugging deals on products that weren’t in stock.
Hustad concedes: “Service levels are 97.5% on key lines. This is not good enough. Our customer is only interested in one thing: whether it’s on the shelves. We are laying off every kind of activity and function not contributing to success on the floor.”
Hans Kristian Hustad wanders down the confectionery aisle at Booker’s Northampton branch and casts a disparaging eye over the signage.“We don’t signpost the aisles properly,” he says bluntly. “The feedback from customers is that it is difficult to navigate the racks. We need to look at things as a retailer would.”
Such candour is typical of the Norwegian who was appointed chairman of Booker and Woodward Foodservice when Icelandic group Baugur bought Big Food Group. Forced to assume the additional role of chief executive when Bill Grimsey unexpectedly declined the job, he admits the situation is not ideal. But, he says in one of his first interviews with the UK press, he is learning to juggle his new responsibilities with home life in Oslo - he commutes weekly to Wellingborough - and getting to grips with the task in hand.
Iceland and Booker, which BFG seemed to sideline as it grappled with the more serious problems at Iceland, were formally separated on February 11. Almost two months on, the straight-talking Norwegian is still slashing through the red tape that bound them. “The group functions meant a lot of bureaucracy. Everything needs to be simplified.”
Unfortunately, that includes the workforce, which was told this week that 82 of the 440 head office staff were being laid off. Some of the cuts are the result of abandoning group functions, says Hustad. But, he adds frankly: “It is a tough market. We are fighting against last year’s negative figures. We have to work hard to generate more growth. People are aware that something needed to be done.”
The remaining workforce will be split into three customer teams, one covering retailers and impulse channels, one caterers and one tobacco and alcohol. Marketing director Mark Collier says: “The new customer-focused teams should be quicker and faster. We’re now going to become leaner.”
Hustad adds that the move will be mitigated by an increase in its sales force by at least 27 - focused primarily on its catering customer base. “We have lost customers,” he reasons. “To get them back we need people to knock on doors.”
The wholesaler, which remains the biggest cash and carry in the UK with 173 depots, has not offered the level of service to its 100,000 retail and 300,000 catering customers it should have, admits Hustad. “I have to apologise for the way we have treated the customer. There are two issues: we had reduced the number of distribution centres to four, causing availability problems, and there were problems with the sales-based ordering system.”
Part of his challenge is to instil a different ethos at the business.“We have to look at Booker from a proper retail perspective. Their attitude is that it is about the customer and that is what we have to do. I am using all my time trying to understand the problem. We have to focus. We have to justify the assortments and make sure items are on the shelf. Otherwise, we’ll turn customers away.”
Availability on faster-moving goods has already improved, says Collier, adding that the team is now working on secondary lines.
Another issue has been range and assortment. Hustad makes no bones of the fact that he wants to see Booker sharpen up its category management. The business is also extending its 200 to 300 SKU range of chilled and frozen lines, which at the moment are focused primarily on caterers’ needs, to include more products aimed at its retail customers. “It’s our intention to have a stronger fresh frozen and chilled offer and give our customers a professional delivery service on these lines,” says Hustad.
“Tesco is a threat for everybody. Our answer is to take as much care of our independent retailers as possible.”
Meanwhile it continues to aggressively expand Premier, now the fastest-growing independent symbol group in the country. And on the catering side, the Booker Express delivery service is being rolled out to a further 100 branches following a trial in 50 branches.“We’re now capable of being the number one top-up for caterers,” boasts Hustad. “As retailers, we want to support them in a more professional way.”
Hustad promises caterers and retailers can expect to see a very different business emerge over the coming months. He points to the introduction of a new management information platform that allows larger customers to open single accounts and shop in multiple branches, making Booker the first C&C to offer customers national accounts.
There will also be a greater effort to customise products to the needs of individual members, he says. “If customers want lines that are unique to them, we should aim to supply them.” Hustad is even looking at ways to leverage Baugur’s relationship with co-Big Food Group investors HBOS and West Coast Capital to offer customers financial services.
But one of the biggest changes in the pipeline is an overhaul of the delivered side of the business. At the moment, deliveries are made from the cash and carries, with the exception of those served by the Wolverhampton local delivery centre, which handles deliveries on their behalf. The plan is to have six to 10 large LDCs such as Wolverhampton nationally.
There may be some rationalisation involved, but he denies rumours that 40 branches face the axe. The emphasis will be on making the existing network work more efficiently, he says, highlighting plans to utilise some of the vacant space in its super depots. There are no plans to offload Woodward Foodservice, he insists.
With the HO shake-up now under way, life at Booker is proving something of a baptism by fire for the Norwegian, who says that the only thing he misses in the UK apart from his family is cross-country skiing.
Next year, a new chief executive is likely to be in place. By then, Hustad hopes to see a Booker that is leaner but not meaner. “I don’t like sitting in a chair all day,” he says. “My intention is to have spent as much time talking and listening to people as possible. A year from now, I think customers will say the business is more customer-orientated and that they’ve seen an improvement.”
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