Ongoing investment in technology and improving efficiencies helped independent Glasgow-based food and drink wholesaler JW Filshill Ltd increase pre-tax profits to £1.3m in the year to January 31, 2015 – up from £0.8m the previous year; the wholesaler is also predicting that the decline of sales in recent years will reverse, with growth returning within the next three years.
The award-winning company, owner of the leading KeyStore convenience store brand, achieved gross profit of £10.1m and reduced operating costs by a further £400,000. Turnover for the year was £151m, down 4.4% in what the company called “a highly challenging retail trading environment” and amid strong competition.
Filshill, which is marking its 140th anniversary this year, drove down costs by ramping up investment in IT systems and adding value to the services it offers its retail customers across Scotland and the north of England by introducing innovative selling techniques via social media platforms.
The company also launched its export subsidiary, JW Filshill International Ltd, trading as The Craft Beer Clan of Scotland.
Simon Hannah (pictured), managing director of JW Filshill, said: “The independent retail trade remains highly competitive and challenging, and we seek to manage the principal risk of losing customers by offering strong promotions and wide-ranging advice and support.” Advice with store layouts, promotional leaflets for consumers, digital social media marketing and free on-loan Epos till installations had been well received by the firm’s progressive retail customers, he added.
“Continued investment in IT systems, electronic order capture methods and electronic date interchange with suppliers continues to add value to customers, suppliers and our business,” Hannah said.
Added-value support for all customers, Hannah pointed out, was particularly important at a time when competition from the large supermarkets remains intense. But he said that competition from other independents and discounters was also increasing with new players arriving on the convenience store scene.
“The good news is that independent retailers are experiencing a resurgence in popularity with consumers who are increasingly turned off by the major retail multiples,” he said. “However, we have the more recent competition from the discount retailers – Lidl and Aldi – which are striking a chord with consumers who previously haven’t considered shopping there.
“That’s why we’re investing more heavily in technology and social media, and trying to be smarter when it comes to marketing in order to engage with shoppers who are increasingly using mobile technology in their everyday lives.”
An upbeat Hannah also pointed to JW Filshill’s strong balance sheet, showing net assets of approximately £14m. “We continue to place emphasis on staff performance and measured incentives schemes and believe that the monitoring of non-financial KPIs such as vehicle fuel performance, sales service levels/range achievements, unanswered telesales calls and returned orders is an effective part of our business performance review.
“We believe the decline of sales in recent years will reverse and growth will return within the following three years due to population growth and a change in consumer spending habits migrating towards the convenience sector.
“We also expect export sales via our new JW Filshill International Ltd business to reach satisfactory levels by 2016.
“Interest in our export sales and consolidation model is increasing with more Scottish producers looking for us to take their products to international markets as part of a wider Scottish portfolio.”