Growth in the overall grocery wholesaling market in 2005 was the slowest for over a decade and the total cash and carry sector fell in value by 1.8%, according to the research body IGD.
In its annual UK Grocery Wholesaling report published this week it said the overall grocery wholesale market grew by 0.6% to pound;16.8bn, with the cash and carry sector declining 1.8% to pound;9.33bn and the delivered sector growing 4.9% to pound;7.55bn. Foodservice specialists such as Brakes and 3663 are not covered by the report.
According to the authors, the decline in the market was consistent with the general slowdown in retail spending during 2005. However, the report adds: “Trading remains especially difficult for wholesalers owing to the progressive erosion of their key customer base in the independent retail sector.”
Other factors contributing to the decline were issues in the tobacco market and deflation in key categories such as beer, wine and spirits.
The report noted: “While individual cash and carry operators are achieving successful growth, the sector as a whole is heavily influenced by the fortunes of its largest operator, Booker, which endured a particularly poor year.”
It added: “The new management at Booker faces a significant challenge, following several years of declining sales and mismanagement.” Charles Wilson took over as chief executive of Booker at the end of October and revealed his revival strategy at the FWD annual conference last week (see page 4).
Despite this year’s slowdown, the report predicted the overall market would increase to pound;18.4bn by 2010, at an annual average rate of 1.6%.
It suggested the delivered sector would continue to grow at a faster rate than cash and carry, 3.4% compared with 0.4%, but cash and carry would still be the larger of the two at pound;9.5bn compared with pound;8.9bn.