The sudden collapse of Palmer & Harvey left its retail customers and major suppliers scrambling to shore up their supplies this week.
Despite the fact P&H had been in trouble for several months, its demise still caught many customers and even the tobacco giants, which had been propping the business up, on the hop before their contingency plans could be fully implemented.
P&H’s biggest customer Tesco this week said that though it had a contingency plan, tobacco lines would be hardest hit by temporary shortages in days to come, though it stressed the number of products was “very small”.
The wholesaler’s contract to supply and distribute tobacco lines for Tesco, as well as all ambient non-tobacco directly to all Tesco forecourts and all frozen to Express stores, accounted for c40% of its turnover.
McColl’s, which in the summer served notice it was terminating its supply deals with both P&H and Nisa in favour of a new agreement with Morrisons, was also left considering its options. Its deal with P&H to supply hundreds of small CTNs was due to continue until the middle of next year.
McColl’s said it had not yet finalised its contingency plans, though it is thought likely Nisa will deliver to these stores in the short term while looking to accelerate the switch to Morrisons.
It currently has six or seven weeks’ worth of ambient stock, the mainstay of the affected stores, and two weeks’ provision of tobacco.
Costcutter, whose new a supply deal from the spring with the Co-op arguably triggered the collapse of P&H, has also promised to support Costcutter retailers in the short term, while wholesalers including Booker, Bestway, Nisa and Today’s have all indicated they are looking to support P&H’s former customers. The Grocer understands Bestway has picked up the contract to supply the 116-strong Central Convenience chain, which was owned by P&H but run as a standalone.
Bestway MD Martin Race said the wholesaler was “able to support any retailers who needed help”. Booker CEO Charles Wilson echoed these sentiments: “We are ready to help any P&H customers whether small independents or national retail chains.”
As The Grocer went to press major tobacco suppliers were expected to supply directly to major multiples while looking to other wholesalers and buying groups to look after independents.
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