Regional wholesaler Dee Bee has pledged not to impose delivery surcharges onto its retailers amid rising costs.
The company’s managing director, Nick Ramsden, told Better Retailing it had seen increased pressures from a surge in utilities, but that it wouldn’t impose any extra fees. “It’s not in our plans to add delivery charges,” he said. “We did discuss it as a management team, and decided retailers wouldn’t particularly like that.
“Our electricity costs have doubled, national living wage has had a big impact on inflation, plus national insurance.
“Fuel is up 50% compared to last year, and our insurance bills have also increased by 50%. Everything has also massively increased for us.”
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Rivals Nisa and Booker notably implemented delivery charges for its retailers earlier this year, attracting criticism from affected store owners.
Explaining how the wholesaler plans to offset these rises for itself and retailers, Ramsden added: “One other way we’ve been able to combat inflation is to increase sales, and it’s a route we’re trying to chase as well.
“We’re trying to get better margins out of price-marked packs (PMPs) in conjunction with our parent group, Unitas.
“We’re trying to negotiate with manufacturers to give bigger margins on PMPs. In some areas, we’re making a conscious decision to leave PMPs because the margin isn’t sustainable.
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“It’s an inflationary period. We’ve got eight stores ourselves and we’re seeing the impact. We’ve got to increase RRPs, which is hard to do on PMPs as it’s governed.”
In the past few months, some suppliers have faced criticism from wholesalers and retailers for increasing the wholesale price (WSP) of certain items, but squeezing the margin by maintaining the PMP. Further increases on WSP have not been ruled out, as suppliers continue to blame rising costs for their decision.
Ramsden added own label was a possible way to combat shrinking margins.
The company already offers Lifestyle own label. On its website, members of the Today’s symbol group can also access Co-op lines.
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Commenting on sales post-pandemic, Ramsden told Better Retailing: “We’re ahead of last year. Retail has become a bit sluggish, but it’s still up on the previous year.
“Tobacco seems to be struggling at the moment, but that’s across the board. People are going abroad now and contraband cigarettes are becoming more widely available.
“More customers are also moving from tobacco into vaping, which is moving like a train.
“Alcohol is a bit slow, but that had an upside during Covid-19. Emerging categories, such as food to go, are high on our customers’ agenda. Slush machines also seem to be very doing well.”
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