Wholesale customers need margin reassurance

Alfa Wholesale in Glasgow prides itself on being different. Trading from just 15,000sq ft it manages to pack in all the essential FMCG lines, but is also famous north of the border for its ethnic offer – from Middle Eastern and Turkish to Chinese and Afro-Caribbean.

Despite a fire that destroyed the depot on Friday, April 13, 2012, the business has literally risen from the ashes, stronger and more determined, driven by the passion and understanding of the Rashid family that founded the business.

Speaking at the Him! Birmingham event, Alfa Wholesale director Atif Rashid explained that before the fire the business was “motoring”, seeing growth of between 2% and 3% despite the economic downturn.

After the fire the Rashid family managed to keep on its 30 staff using personal funds and a swift insurance settlement and now two years on the business is going from strength-to-strength.

Rashid says when the new depot re-opened they had considered dropping traditional FMCG lines and the tobacco offer, but quickly realised that it was actually the unique product mix that kept customers coming through the door.

The 5000 ethnic SKUs are packed in, many with single facings, to meet the needs of both the foodservice operators and, increasingly says Rashid, the retailers stocking non-traditional lines.

He told delegates at the him! event: “Really good busy symbol stores are giving space over to food-to-go and also ethnic…they are feeling the pressure and looking at whatever lines will shift. Ethnic is growing and not necessarily in those areas you might have associated with it – but it’s there now. But what aren’t they giving space to? That’s some of the more traditional grocery products. They condensed them right down because they’re not selling to our profile of customers.”

And offering some insight and advice to suppliers he said his customers don’t necessarily trust the margins being offered by price-marked packs. He added that city centre traders weren’t interested in PMPs because their location allows them to charge a premium while other traders were suspicious that PMPs didn’t offer them the best value.

“They need to be educated about what the margins are on PMPs. There’s an element of them thinking the margins aren’t good enough for them as perhaps they are.”

* For the full details of the him! research into foodservice and retail wholesaling see the September issue of Wholesale News

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