Overall, it’s true that the last 10 years has seen the market for delivery grow while cash and carry has remained relatively stable. Yet the last 18 months has been particularly strong for cash and carry signalling a definite comeback. This trend follows conventional wisdom, which suggests cash and carry does well in a recession. After all, if you cannot obtain credit due to a credit crunch, cash becomes the only option and therefore cash and carry thrives.
However, this thinking would also suggest that once the recession is over, delivery becomes king again and therefore, where is the future for the cash and carry? But it is not true that the comeback seen in cash and carry is due solely to the recession.
Research shows the pricing image of cash and carry has improved dramatically over the past three years, as has availability – both crucial factors for catering businesses. The question then becomes how much can you continue to improve these factors?
Availability can only ever be 100%, and continued pricing improvements damages margin so has to have a cut off point. What then for cash and carry?
It is important here to look at the figures. Of total foodservice spend in fresh, only 15% is with cash and carry and 85% is with delivered, while the market share of cash and carry in beer, wines and spirits is 90%. So therefore there is plenty of room for continued development and growth in cash and carry.
Again wisdom holds that fresh is the domain of delivery rather than cash and carry, which is more suited to ambient products. However, at Makro we think otherwise!
We believe cash and carry can be vastly superior in fresh. Not least, caterers can see, touch, smell and even taste what they are buying and choose accordingly. If you’re a restaurant with daily specials that constantly change, spotting what’s ultra fresh is crucial to menu development and is therefore key to your business.
With fantastic fresh ranges constantly on display, caterers can also keep an eye on what’s new, and identify the all important ‘catch of the day’ which can be immediately transferred onto the menu board.
It’s vital for caterers to be able to see where they can improve their own margins. If you take a typical pub meal for instance, such as roast beef with Yorkshire puddings, potatoes and veg, the meat makes up about 67% of the cost, therefore improving their costs on the accompanying fresh articles is crucial.
But above all, let’s not forget that business isn’t just about numbers and products, it’s about people. Going into a store also helps build relationships, not only with the store manager, but with other professionals who understand that customer’s business – butchers, fishmongers and fruit and vegetable specialists – a role that simply a driver could not deliver.
So the future is certainly bright for the cash and carry business!