Big 30 wholesaler report 2025: an inconvenient truth

Wholesalers are reeling from the Chancellor’s bombshell autumn budget. And it’s not just the direct impact – a £110m hit from NI and national living wage increases on its 70,000-plus employees, according to the Federation of Wholesale Distributors.

It’s the hit to the thousands of small businesses – already struggling with food price inflation, higher energy costs, higher labour costs, higher borrowing costs, higher property costs – that wholesalers typically serve. The budget made all those factors worse. As Bidcorp UK CEO Andrew Selley says: “after the business-friendly overtures” before the election, the budget and other measures have shown “the new government to be anti-business. I have seen nothing to help our business, our customers or our suppliers, just constant gaslighting by the government on going for growth while legislating for contraction.”

In these challenging conditions, the big wholesalers are getting bigger. The Grocer Big 30 Wholesaler ranking shows the top three (Booker, Costco, Sysco) accounted for £19bn of sales – more than half the total, and achieved strong market growth. And while some of the performances can be put down to the post-pandemic recovery, in what are necessarily historic accounts, fortune is favouring the giants, with their access to the big market capitalisations of their parents (Costco $470bn, Sysco $36bn and Tesco £25bn).

Structural issues

But on top of the macro-economic situation, there’s also structural changes within the industry to contend with, and none more so than the steady decline in sales to the independent convenience sector.

Of course, wholesalers know the dangers of being overly reliant on servicing just one sector, and many traditional grocery operators have diversified into foodservice.

This trend continued in October when Bestway confirmed the acquisition of Adams Foodservice, a deal that will see the wholesale giant place a greater focus on its catering operations. “The acquisition has added a further eight depots to our existing network, enabling us to scale and grow the business,” says Bestway Wholesale MD Dawood Pervez. “This is the first vertical launch of focus for Bestway in the category foodservice market, with more to follow.”

The figures for independent convenience, however, make for uncomfortable reading. According to Circana, symbol and independent stores were consistently losing share of convenience sales to the major multiples’ convenience formats throughout 2024. While the convenience pie is getting bigger, the share for customers of many of the UK’s wholesalers is shrinking.

The reasons for this are twofold: continued expansion into convenience by the major multiples; and the increasing price gap they’re opening up over independent rivals, says Circana senior strategic insight director Alex Lawrence.

The inconvenient truth is that independent convenience stores are finding it harder than ever to compete – and not just with the likes of Tesco Express and Sainsbury’s Local, but with Aldi and Lidl, whose continued store opening programmes are making the discounters ever more convenient for shoppers.

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“You know, there’s not a lot of money to be made in convenience any more because of the prices,” warns one leading industry source. “Shoppers understand the nature of convenience and sometimes you might pay a price premium, but they won’t use a more expensive shop if they can go over the road to Aldi or Lidl or Tesco Express. The differentials are so high that it becomes unsustainable.”

Price has always been a thorny issue for independents. And it works both ways. There is an old fear that suppliers who come under pressure from the supermarkets to keep prices low will try and make up margin from the wholesale and convenience channels: the so-called waterbed effect.

But whatever the truth, Unitas Wholesale MD John Kinney is alarmed at the “real disproportionate price variances between channels. When we’re off promotion, our price-marked packs (PMPs) in some cases are out of line. It’s making us look really expensive, which is not what we want to be in a value-driven sector.”

The changing convenience picture is also the number one concern for Bestway’s Pervez. “There has been a big channel shift from convenience to the mults which started from late 2023,” he claims. That was when they started “competing with supermarket loyalty cards, which are funded through revenue raised by large retail media groups. Convenience stores are unable to compete with this level of investment in price.”

And wholesalers have a stark warning to suppliers: either they provide more support or the independent c-store route to market – which has been such an invaluable test bed not only for sales but for ideas and innovation – will slowly but surely disappear.

The Big 30 annual ranking shows year in, year out that this is a sector packed with strong and successful operators, and that would also suggest an industry worth backing. They too have delivered their side of the bargain via investment in online delivery. So it’s time for suppliers to step up. And not just on price.

As a delivered operator JW Filshill has invested heavily in IT and MD Simon Hannah is clearly proud of its performance: Filshill sales were up 5.9% in the year to 31 January 2024. But “the market has been challenging in the last 12 months with the retail convenience sector in decline, anywhere between 2% and 3%,” he admits. So like many wholesalers, he is hoping for more from suppliers.

“Service levels have faced challenges across most categories in recent years,” he adds. “While inbound availability has marginally improved, certain categories like confectionery remain below retail and consumer demand, leading to missed sales, value and margin opportunities.”

Kinney is conscious that wholesalers asking for more help from suppliers, particularly when it comes to margin, is nothing new, but there does feel like there is more urgency in the calls now.

“I’m conscious every year you get the buying groups and the wholesalers talking about margin and price, it becomes wallpaper,” he admits. “But this is getting to the point now that you see shoppers driving value own-brand and the value proposition in general, it isn’t a short-term trend. This is the way the consumer now shops in the UK. The government may have taken the view that it will put some more money in people’s pockets through the national living wage, [but] there will be a problem that people do not actually see the benefit because price increases will take that away.”

Wholesalers like Hannah are not simply holding out a begging bowl to suppliers. They are taking action of their own. Through its investment in data, Filshill can work more effectively with its supply base around issues such as promotions and compliance to improve sales, he points out.

“We benchmark promotions against the multiples and discounters, challenging suppliers on rsps and supporting them with compliance and shopper data,” Hannah explains. So he’s urging suppliers to meet wholesalers halfway.

Parfetts investing for the future

Of course, there are still pockets of growth and opportunity. One notable example is Parfetts, which in February confirmed plans to open a new 113,000 sq ft depot in Southampton. The site, which is due to open later this year, will be the wholesaler’s ninth depot and makes it a genuinely national operator, delivering across the south of England and into Greater London.

Joint MD Guy Swindell acknowledges the competition from the big supermarkets “is not going away”. He says it “provides a focus for Parfetts to improve every part of its operations, to ensure retailers have access to the great value that supports margin alongside the support they need to trade efficiently”.

But Parfetts is an outlier – along with Dhamecha, with plans for a 13th depot – and consolidation is a much more live issue in the sector, with deals such as the Bestway move for Adams and Kitwave snapping up Creed Foodservice for £60m in September. Bidcorp’s Caterfood Buying Group continues to actively seek new members while fellow foodservice giant Sysco GB, owner of Brakes, acquired Campbells Prime Meat at the end of October.

“It’s likely there will be further consolidation in the market,” Sysco GB CEO Paul Nieduszynski believes. “Our direction is that we want to acquire great businesses that add value to our offer. That’s why we bought Campbells Prime Meats last year – it’s a market-leading meat business, offering exceptional-quality, centre-of-plate options.”

And it’s not just wholesalers that have seen consolidation. Late last year buying groups Confex and Fairway Foodservice came together to create The Wholesale Group, a combination with joint buying power of £4.47bn. The new buying group officially launched in January, with 11 new members so far. Joint MD Tom Gittins said at the time he was confident the group would reach the £5bn mark in short order, and would be pushing to become the UK’s biggest wholesale buying group within five years.

“The Wholesale Group is built around collaboration between multi-generational family businesses who remain specialists in servicing their local communities. This industry-wide experience, spanning more than 100 years of wholesale, is harnessed by The Wholesale Group and cannot be replicated by our competitors,” claims Gittins.

“Service remains at the core of what we do with suppliers who are willing to listen and understand our need. In turn, suppliers are consistently achieving group growth way above the market.”

The importance of buying groups

The move highlights, for smaller wholesalers (outside the big five) the importance of buying group membership – and therefore getting the right support. This is certainly the case when buying groups provide many wholesalers with typical head office functions, and thus mean they can keep more of a lid on staff costs – a factor that is becoming all the more important given the Chancellor’s bombshell budget.

Andrew Kirby, commercial director at Holland Bazaar, a traditional Confex member, is looking forward to seeing what joy being in a larger group brings.

“2025 will most probably see a lot more consolidation,” he agrees. “It is becoming more and more apparent that businesses will have to be of a certain size to gain the most beneficial terms from major suppliers. 2024 had already seen a movement towards this and even the buying groups are looking at this now, as shown by the merging of Confex and Fairway.

“We get great support from our group and are looking forward to the benefits of digital activity and data insights along with a push on IT, driven by our buying group centre. We will be expecting better terms of trade and promotions, along with enhanced relationships with suppliers.”

It will be interesting to see if buying groups can secure more support from suppliers. Unitas boss Kinney says they have already begun conversations at its recent senior supplier briefing, and he wants to make sure those talks were not just his famous “wallpaper”.

“We raised the issue of disparity,” he confirms. He is realistic enough to know inflation is creeping back into the market, but his main ask for suppliers is that when they are talking about price increases, they talk to his team first before setting the new prices, so that negotiations can be tackled in a more nuanced way rather than simply a blanket approach.

The coming year certainly looks set to be another fascinating one for the wholesale sector. Will the industry be able to get everyone singing from the same hymn sheet – and, more importantly, can wholesalers ensure it’s not the same old song