Changes introduced by Booker’s new management team to its catering offer appear to be working, with sales growing over the past quarter, reversing a long-term decline. Chief executive Charles Wilson said sales had fallen by 6.3% in the first quarter of the 2005/2006 financial year, compared with the previous year, but since then the shortfall had steadily reduced and sales growth of 1.9% was achieved in the second quarter of 2006/2007.
Emphasising the scale of the Features > Business, he said that Booker has 260,000 catering customers and, if tobacco turnover is excluded, its sales to caterers and licensees are roughly equal to sales to retailers. In addition, the company’s delivered Features > Business, which provides nationwide multi-temperature coverage, has a turnover of about pound;0.5bn.
Wilson said his involvement with the specialist catering cash and carry business Hub Wholesale, immediately before he joined Booker, had given him an insight into the strengths and weaknesses of Booker’s catering offer. He said competing against Booker had shown him the fundamental strength of its catering Features > Business, and this was something previous management had not appreciated. But there were gaps in its offer, and part of his strategy was to address this and increase the choice for customers.
For instance, despite the boom in coffee drinking, a year ago Booker did not stock any coffee beans. Now a range is being developed including a Fairtrade option.
Kegs have also been introduced in about 150 branches and sales are now approaching 2,000 kegs a week. Wilson emphasised that they had been introduced to help licensees top up when they needed to cope with peaks in demand, and were not intended to compete with licensees’ normal suppliers.
Booker is also trialling a wider range of non food items in a handful of depots. These depots have also undergone a minor refit, with brighter lighting, improved signage and new orange livery, and have been branded Booker Wholesale Club or Booker Wholesale. Wilson said the new looks were at an early stage of their trials, and he would not be drawn on whether it would be rolled out further.
Pricing has also been reduced through the company’s Rollback programme and a new range called Booker Basics. Rollback involves permanent price cuts on items and has now been applied to more than 500 lines. Booker Basics is an entry level range of key ingredients and disposables and currently comprises 25 lines.
Prices on Booker’s fruit and vegetable offering have also been reduced after it moved from a single national supplier to local sourcing. Wilson said they had been able to offer a wider range, which was fresher because it had travelled shorter distances, and cut their prices. In addition caterers, and their customers, often preferred to use fruit and vegetables that were local.
Availability was also a key issue, said Wilson. With more and more licensees and other caterers turning over storage space to sales, they had little room for stock and needed to be able to able to rely on sourcing what they wanted from their local depot. Currently availability was at a four year high of more than 98%.
Ron Hickey, director of catering, said the company had also introduced 52 business development managers dedicated to helping caterers and licensees develop their businesses. He said they provided nationwide coverage and were able to keep Booker in touch with its customers’ needs.
Hickey also emphasised the importance of deliveries to catering and licensed customers, and said Booker’s national coverage was achieved using local depots. Only five out of Booker’s 172 depots do not handle deliveries and their territories are covered by neighbouring depots.
A new internet site is also being tested by Booker customers and will be rolled out next year, but Wilson was not willing to say what new services it would be providing.