I predict cash and carry will over the next few months regain some – although not all – of the market share lost to delivered wholesalers as independents seek to maintain margin in the face of the squeeze on consumer spend.
In recent years the pendulum has swung in favour of delivered. But we now know these were comparatively benign times. We now know that the superstores have never indulged in real price wars – just make-believe price competition.
Superstores have enjoyed high profitability and increasing margins, giving the lie to genuine price wars which erode margins. Regulators were asleep. Multiple top brass enjoyed each other’s company. Bliss.
Against this background, many independents switched from cash and carry to delivered. But the scene has changed dramatically. The recent Competition Commission hearings revealed angst against Tesco by fellow giants. The Other Three want to see the back of Tesco’s dominance. So it’s war for real and we see the smoke and dust of the battle every day in the form of the multiples’ adverts for price cuts and free PR puffery in our newspapers.
The cash and carry price proposition is a consideration (even though my retailer focus group tells me that some harassed depot managers need lessons in customer care; staff need product knowledge training; and depot layout and signage is dire).
One cash and carry company has seen turnover increase by 8% over recent weeks despite lower cigarette demand and sales lost to increased alcohol duty fraud. Delivered wholesalers will respond.
In recent years the pendulum has swung in favour of delivered. But we now know these were comparatively benign times. We now know that the superstores have never indulged in real price wars – just make-believe price competition.
Superstores have enjoyed high profitability and increasing margins, giving the lie to genuine price wars which erode margins. Regulators were asleep. Multiple top brass enjoyed each other’s company. Bliss.
Against this background, many independents switched from cash and carry to delivered. But the scene has changed dramatically. The recent Competition Commission hearings revealed angst against Tesco by fellow giants. The Other Three want to see the back of Tesco’s dominance. So it’s war for real and we see the smoke and dust of the battle every day in the form of the multiples’ adverts for price cuts and free PR puffery in our newspapers.
The cash and carry price proposition is a consideration (even though my retailer focus group tells me that some harassed depot managers need lessons in customer care; staff need product knowledge training; and depot layout and signage is dire).
One cash and carry company has seen turnover increase by 8% over recent weeks despite lower cigarette demand and sales lost to increased alcohol duty fraud. Delivered wholesalers will respond.
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