Life at the top is never easy. But it is particularly challenging when the supermarkets are dictating terms in the grocery market and you are watching a resurgent Booker motor ahead with its recovery programme under chief executive Charles Wilson.
Chris Etherington took over as chief executive of Palmer & Harvey McLane in June when MD Graham McPherson assumed the less hands-on role of deputy chairman. Six months into the job, he has his work cut out. Greater momentum needs to be injected into the business, he says.
Over the past few years, the performance of the UK's biggest delivered wholesaler has been solid but unspectacular. Though P&H headed this year's The Big 30 Wholesalers rankings, sales were flat, rising only 0.1% to £3.53bn.
"I feel the business is very good but has been treading water to a degree. In a lot of areas we were doing very well but we weren't as focused as we could be," says Etherington, highlighting P&H's need to get to grips with what its customers want and just as importantly, what their customers also want.
It's a big job, but Etherington believes there are some easy wins. "In terms of where we could be positioned, we haven't moved at the speed we could," he says. "And we weren't understanding our customers as thoroughly as we could. It's about seeing we have all these great assets such as Mace, our symbol group, but thinking - how we can we exploit them?"
First on his to do list was the restructuring of its sales force to reduce costs and increase sales efficiency. Instead of using specialist reps for ambient, temperature-controlled and alcohol, a single sales rep now covers all three areas, supplemented by a call centre.
It is early days but the results so far are positive, says Etherington. "It's working. As with anything like that it's a long haul and you don't get instant results. We want to give the sales force training so they can sell properly. We have started to see some good results from the team. Now, as we go into 2007/08, we expect we can up the ante."
He is also trying to introduce a sharper service for customers. "At the minute we have a one-size-fits-all philosophy and need to be more focused on what customers require and work with them via the reps," he explains.
"To whom do independents go to for advice? They need expertise and advice they're not able to get as independents and some independent multiples are in the same position."
Plans to expand Mace are back on track. Much trumpeted by P&H last year, the original idea was to increase store numbers in Scotland from 36 to 120 by the end of this year. However, plans were put on hold when the management team was re-structured and there are currently just 54. "Following the announcement about expanding Mace, McPherson decided he was going to take a step back, so it wasn't right to do it at that time but the board decided to wait until someone else came on board," says Etherington.
Now that has happened, the expansion can continue, but, stresses Etherington, the emphasis will be on quality rather than quantity.
Product ranging is also under review. "Range is an issue for us, especially alcohol," he explains. "At the moment we have a range in the convenience sector of 800 lines. The core range is only 200, so we seem to be stocking individual ranges for customers' requirements. We need them to understand which products sell, not which ones they think it will be good to stock."
To help customers, P&H issues a revamped focus document every three weeks, outlining offers and products in order to re-educate retailers on what they should be selling.
It also helps to know what his customers are already selling. So Etherington makes a point of trying to meet as many as possible. "I have been out on the road quite a lot with the sales team and I've met quite a lot of customers so I could understand how the customers' businesses are structured," he says. "Now I'm working through the suppliers and I have started one-to-ones. That has been my main concern and so far, so good."
Another part of Etherington's strategy is to roll out a new concept called Sweetsdirect in the wake of the success of P&H's Snacksdirect concept, which involves a fleet of vans that distribute snacks, crisps, biscuits and cake brands to 21,000 outlets. Sweetsdirect is run in conjunction with four confectionery manufacturers to deliver sweets to independent forecourts, CTN's and C- stores. It is still at the pilot stage at the moment with five vans operating out of the north west, but Etherington is hoping to roll it out nationally.
Of course, the underlying objective is to drive sales growth but Etherington is understandably cagey about divulging details of financial targets although he thinks growth is achievable. He concedes it will take a lot of work to get P&H to the growth levels the business is capable of. But he is confident he is the right man for the job, and can bring invaluable insight to the business.
Though it was the first time P&H had appointed an outsider to the top job, he wasn't totally unfamiliar with the business, he adds. "In the mid-nineties when I was working for Unichem it looked at buying P&H so I knew the business."
His conviction the business has strong growth prospects is underpinned by his belief independents still have plenty going for them.
With the Competition Commission inquiry into grocery in full swing, Etherington thinks the rivalry is keeping independents on their toes and helping to raise their game.
"At P&H we see the variety of that because we're servicing both sectors. The independent sector is raising the bar in terms of what it does for the customer. That's been triggered by the likes of Tesco and other multiples, of course. While there's general concern about the power of the supermarkets, they're improving the standard for customers because independents are now striving to meet the same levels."
It isn't easy for anyone in wholesale at the moment, he admits. "Wholesaling is a tough environment and we're the meat in the sandwich that is getting squeezed all the time."
But every threat can be seen as an opportunity, he argues. The key to success is recognising that. "There are always opportunities in declining markets until you have an absolute monopoly. You just have to be clever. Offering the highest quality at the lowest cost is a really difficult thing to achieve, but if you can do that then, yes, the customers will buy from you." n
Q&A
Is the job tougher than you expected?
It's a lot more exciting than I expected but I wouldn't say tougher. There's a lot to do and maybe a bit more than I originally thought but it's really exciting, great fun.
What has been the best moment of your career to date?
I was at Unichem for 12 years and in that time it entered the FTSE-100. But the most significant moment of my career for me was getting this job. Being the main man here is great. There's nowhere to hide and you have to make your decisions and stand by them. I was very excited when I was approached about the role - it seemed perfect, like everything I have been doing for the past 30 years was aimed at getting me here.
And the worst?
I moved out of the fmcg area into automotives and while it was stimulating I didn't realise how much I was missing wholesale until I came back.
How do you relax in your spare time?
I play golf - badly. I love cars, I'm a definite petrol head. My wife showjumps so weekends are really busy.
What do you think of Ofcom's proposal to ban junk food advertising to programmes watched by under 16s?
I'm not sure whether it's the right way to go. I'm a great believer in good parenting in terms of managing children's diets. It's something as a parent you have to take responsibility for. I believe TV ads are a lesser influence than, say, the internet. People just don't watch adverts, if you have Sky Plus you just wind it on. I am slightly concerned about some of the nanny state initiatives taking place and I think a lot of them are more publicity, less substance.
Chris Etherington took over as chief executive of Palmer & Harvey McLane in June when MD Graham McPherson assumed the less hands-on role of deputy chairman. Six months into the job, he has his work cut out. Greater momentum needs to be injected into the business, he says.
Over the past few years, the performance of the UK's biggest delivered wholesaler has been solid but unspectacular. Though P&H headed this year's The Big 30 Wholesalers rankings, sales were flat, rising only 0.1% to £3.53bn.
"I feel the business is very good but has been treading water to a degree. In a lot of areas we were doing very well but we weren't as focused as we could be," says Etherington, highlighting P&H's need to get to grips with what its customers want and just as importantly, what their customers also want.
It's a big job, but Etherington believes there are some easy wins. "In terms of where we could be positioned, we haven't moved at the speed we could," he says. "And we weren't understanding our customers as thoroughly as we could. It's about seeing we have all these great assets such as Mace, our symbol group, but thinking - how we can we exploit them?"
First on his to do list was the restructuring of its sales force to reduce costs and increase sales efficiency. Instead of using specialist reps for ambient, temperature-controlled and alcohol, a single sales rep now covers all three areas, supplemented by a call centre.
It is early days but the results so far are positive, says Etherington. "It's working. As with anything like that it's a long haul and you don't get instant results. We want to give the sales force training so they can sell properly. We have started to see some good results from the team. Now, as we go into 2007/08, we expect we can up the ante."
He is also trying to introduce a sharper service for customers. "At the minute we have a one-size-fits-all philosophy and need to be more focused on what customers require and work with them via the reps," he explains.
"To whom do independents go to for advice? They need expertise and advice they're not able to get as independents and some independent multiples are in the same position."
Plans to expand Mace are back on track. Much trumpeted by P&H last year, the original idea was to increase store numbers in Scotland from 36 to 120 by the end of this year. However, plans were put on hold when the management team was re-structured and there are currently just 54. "Following the announcement about expanding Mace, McPherson decided he was going to take a step back, so it wasn't right to do it at that time but the board decided to wait until someone else came on board," says Etherington.
Now that has happened, the expansion can continue, but, stresses Etherington, the emphasis will be on quality rather than quantity.
Product ranging is also under review. "Range is an issue for us, especially alcohol," he explains. "At the moment we have a range in the convenience sector of 800 lines. The core range is only 200, so we seem to be stocking individual ranges for customers' requirements. We need them to understand which products sell, not which ones they think it will be good to stock."
To help customers, P&H issues a revamped focus document every three weeks, outlining offers and products in order to re-educate retailers on what they should be selling.
It also helps to know what his customers are already selling. So Etherington makes a point of trying to meet as many as possible. "I have been out on the road quite a lot with the sales team and I've met quite a lot of customers so I could understand how the customers' businesses are structured," he says. "Now I'm working through the suppliers and I have started one-to-ones. That has been my main concern and so far, so good."
Another part of Etherington's strategy is to roll out a new concept called Sweetsdirect in the wake of the success of P&H's Snacksdirect concept, which involves a fleet of vans that distribute snacks, crisps, biscuits and cake brands to 21,000 outlets. Sweetsdirect is run in conjunction with four confectionery manufacturers to deliver sweets to independent forecourts, CTN's and C- stores. It is still at the pilot stage at the moment with five vans operating out of the north west, but Etherington is hoping to roll it out nationally.
Of course, the underlying objective is to drive sales growth but Etherington is understandably cagey about divulging details of financial targets although he thinks growth is achievable. He concedes it will take a lot of work to get P&H to the growth levels the business is capable of. But he is confident he is the right man for the job, and can bring invaluable insight to the business.
Though it was the first time P&H had appointed an outsider to the top job, he wasn't totally unfamiliar with the business, he adds. "In the mid-nineties when I was working for Unichem it looked at buying P&H so I knew the business."
His conviction the business has strong growth prospects is underpinned by his belief independents still have plenty going for them.
With the Competition Commission inquiry into grocery in full swing, Etherington thinks the rivalry is keeping independents on their toes and helping to raise their game.
"At P&H we see the variety of that because we're servicing both sectors. The independent sector is raising the bar in terms of what it does for the customer. That's been triggered by the likes of Tesco and other multiples, of course. While there's general concern about the power of the supermarkets, they're improving the standard for customers because independents are now striving to meet the same levels."
It isn't easy for anyone in wholesale at the moment, he admits. "Wholesaling is a tough environment and we're the meat in the sandwich that is getting squeezed all the time."
But every threat can be seen as an opportunity, he argues. The key to success is recognising that. "There are always opportunities in declining markets until you have an absolute monopoly. You just have to be clever. Offering the highest quality at the lowest cost is a really difficult thing to achieve, but if you can do that then, yes, the customers will buy from you." n
Q&A
Is the job tougher than you expected?
It's a lot more exciting than I expected but I wouldn't say tougher. There's a lot to do and maybe a bit more than I originally thought but it's really exciting, great fun.
What has been the best moment of your career to date?
I was at Unichem for 12 years and in that time it entered the FTSE-100. But the most significant moment of my career for me was getting this job. Being the main man here is great. There's nowhere to hide and you have to make your decisions and stand by them. I was very excited when I was approached about the role - it seemed perfect, like everything I have been doing for the past 30 years was aimed at getting me here.
And the worst?
I moved out of the fmcg area into automotives and while it was stimulating I didn't realise how much I was missing wholesale until I came back.
How do you relax in your spare time?
I play golf - badly. I love cars, I'm a definite petrol head. My wife showjumps so weekends are really busy.
What do you think of Ofcom's proposal to ban junk food advertising to programmes watched by under 16s?
I'm not sure whether it's the right way to go. I'm a great believer in good parenting in terms of managing children's diets. It's something as a parent you have to take responsibility for. I believe TV ads are a lesser influence than, say, the internet. People just don't watch adverts, if you have Sky Plus you just wind it on. I am slightly concerned about some of the nanny state initiatives taking place and I think a lot of them are more publicity, less substance.
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