Wholesalers have demonstrated their faith in the future of their sector with a wave of investment in their businesses during 2006. New premises for a wide range of companies and trials of new formats such as those being undertaken by Booker (see page 23) are signs that wholesalers, and their suppliers, can look forward to 2007 with confidence.
One of the biggest investors has been Bestway Group, which recently revealed that it had invested pound;25m in existing locations and new developments in the past 12 months. This year it has opened new replacement premises in Leicester and Hackney in east London, and it has announced plans for its 50th and 51st depots, a Bestway depot in Edmonton, north London, due to open in March, and a Batleys depot at Gillingham, due to open in July.
Zameer Choudrey, Bestway Group chief executive, commented: “Edmonton and Gillingham are the latest examples of Bestway’s continued commitment to the UK’s wholesale cash carry sector.”
Some of the refurbishment work at Bestway’s depots involved enhancing its catering offer, and investment in this sector has been particularly heavy. Makro spent pound;5m on a makeover of its Rayleigh depot in Essex, with much of the new facilities aimed at its catering customers. The changes implemented learnings from a refurbishment of its Charlton depot last year, and Makro is planning further refurbishments during 2007.
Another big foodservice player, 3663, has opened a new depot at Cannock in the West Midlands, and its frozen depot in Enfield has been converted into a fresh depot for 3663’s sister company Swithenbank.
Costco has also kept up the pace of its expansion in the UK with its 18th depot opening in Sheffield during the summer and its 19th depot opening at Ellesmere Port, near Chester, this month.
Another big delivered wholesaler, Preston-based Spar distributor James Hall Co, announced plans to spend more than pound;30m on a replacement for its current depot which will be fully operational in three years time.
And new depots and facilities have not only been the preserve of the biggest companies. June saw the opening of a pound;250,000 chilled depot at Creed Catering Supplies’ headquarters near Cheltenham. The new facility trebled the chilled capacity at the pound;20m turnover company.
Members of the Sterling Supergroup have also been moving into bigger premises. This spring Freezer Fare moved to new premises in Weeley, near Clacton, Chadds of Bude opened a new modern warehouse on the outskirts of Bude and Caterfood opened a new 20,000sq ft warehouse allowing it to house ambient and chilled products on the same site as its established frozen food operation.
Suppliers show commitment
Suppliers, too, are investing in the wholesale sector to ensure they, and their wholesale customers, make a healthy return. One of the biggest supporters of the wholesale sector has been the tobacco industry whose businesses are already so closely linked with wholesaling.
With government legislation banning advertising, except to tobacco traders, tobacco rooms in the cash and carries have become the commercial frontline for brands fighting for market share. Overleaf you can see details of some of the products and services provided for wholesalers and their customers by Imperial Tobacco.
Another category where the wholesale trade handles a healthy portion of overall sales is confectionery. Next year the trade can expect a huge battle as Cadbury Trebor Bassett challenges Wrigley’s domination of the gum market.
Using expertise from Adams, the US company it took over in 2003, Cadbury is launching Trident into the UK market, promising a pound;10m spend, and we can expect Wrigley to invest in its brands and NPD to defend its position.
There are many other products and brands fighting for space in cash and carry depots and on PLOFs, so the industry can look forward to 2007 with confidence.