The coronavirus crisis has had a massive impact on the wholesale sector. Foodservice specialists have been left reeling by the hospitality shutdown while grocery players have enjoyed huge upticks in sales as shoppers turned to local stores in their droves. In an exclusive interview, Parfetts joint MD Greg Suszczenia tells The Grocer how it is maximising the sales opportunity, working with suppliers to maintain supply and planning ahead for the rest of the year.
What has been the impact of this crisis in terms of your sales performance?
We turned over £14.3m last week compared to £7.1m for the same period last year. That’s an average of over £2m per depot, and a 120% uplift excluding tobacco.
January to the end of May is up 48% for the total business, which includes pre-coronavirus trading months.
Which categories have seen the biggest increase?
Broadly speaking, licensed trebled last week and impulse and grocery doubled versus the same week last year.
Is it possible to turn this boom into long-term growth and how will you facilitate that?
This has gone on long enough to change people’s shopping habits and I’m sure many people will remember how helpful and supportive shops in the heart of their communities have been.
Proactive retailers are more focused than ever on upgrading their businesses and seem keen to work with us and our new designs. Sustained high turnover, government grants and bounce back loans have definitely injected a lot of renewed vigour into many of our customers and we are already talking to many about the fascia and delivery support we offer.
We see no reason why we can’t retain most of the new delivered business. Going into this, delivered represented 25% of our total turnover and that share is exactly the same now but at twice the amount.
A lot of new customers have now seen how we have continued to invest in this part of our business. Many symbol store owners have also learnt that putting all their eggs in one basket has left them wanting when supply faltered. A van on the driveway has proved a Godsend for many in trying to fulfil demand by visiting various wholesalers. This level of entrepreneurship has played a large part in helping convenience win the coronavirus retail battle.
How sustainable is trading at this level?
We can certainly cope with high volume as that is what most of our depots were originally designed to do. Over the decades inflation has protected turnover but actual volume has reduced so coping now is relatively simple to do, particularly with our `Direct Load` checkouts for large customers.
The hard part is coping with substantial delivered operations that also run out of most depots, which is why we have moved to a 24-hour operation in half of our estate.
Despite the sales increases, the wholesale channel has still suffered in terms of getting the stock it needs. What support are you now looking for from suppliers?
I would really like suppliers to just start thinking differently. As an example, if our channel could sell 18pk Carling at the same price as the mults, I genuinely believe that we could replace much of their volume, but most MDs haven’t got the confidence to change their pricing architecture.
We were heading towards a future of online retailing supplemented by an enjoyable physical shopping experience closer to home. This crisis has seriously accelerated that.
I can see the suppliers that are fixated in the ways of the past and those that are adapting and it’s obvious to me who will win.
With the right stock allocation what uplift in sales could you be trading at?
As a snapshot, I think last week’s 120% increase would have been over 150%.
There are gaps in all departments, but alcohol has the biggest impact on topline sales.
This is exemplified when a week’s allocation of a key line is delivered and sells in a day.
How much is coronavirus costing Parfetts?
“I would put a ballpark figure of increased coronavirus related costs at £175k per week. This includes professional security in all branches. We introduced a £100 a week lockdown bonus for all staff who remained in the business when it began and at times we have had up to 80 additional temporary staff.
Are you in a position to plan for Christmas?
Our time comes when the holiday period begins and I guess this year will be no different, other than that we will be still trading up in general so we will enjoy a pro rata Christmas uplift.
But I see summer as a far greater opportunity and success there will carry over. We always benefit from hot weather and sport on TV. Less people going abroad for holidays can only be good for the whole of UK retailing.
All these things are immediate opportunities, which is why we need supplier support right now. It’s difficult, but if they try and adjust now they will reap the long-term benefits and it’s always good to have a diverse customer base.
No comments yet