An unprofitable business model meant the administration of chilled supplier Kerryfresh was “inevitable”, an industry expert has told RN.
Wholesale expert David Gilroy said the company’s structure was too complicated to ensure its survival.
“Retail is a tough market and it was inevitable that Kerryfresh would go into administration,” he said.
“It’s been struggling for a while because of its costly operation. Not only are they delivering stock with short shelf lives, but van drivers handling their goods were also doing the merchandising.
“All these additional costs meant the margins it was operating at were unrealistic.”
The announcement that Kerryfresh was entering administration was made last week, with Duff & Phelps handling the process. According to the administrator, Palmer & Harvey’s collapse in November was a major catalyst for Kerryfresh’s recent issues.
More than 300 employees across 19 sales centres will be affected.
Anita Nye, of Premier Eldred Drive Stores in Kent, said she was not surprised about the announcement.
“I have had a feeling they were going to go under since Christmas. They just tried to do too much. They tried branching out into areas such as dairy, but this didn’t work because the prices were uncompetitive. They should have stuck to products they were good at like fresh meat.”
Jatinder Sahota, of Max’s Londis in Sheppey, agreed Kerryfresh’s administration came as no surprise.
“They didn’t move forward with the times. In addition to uncompetitive pricing, the availability and service weren’t great either. They always tried to offer you stock you didn’t want,” he said.
Kerryfresh joint administrator Allan Graham added: “The company’s management team have been trying to secure additional investment or find a purchaser for the company in recent weeks but, unfortunately, both strategies proved unsuccessful and insolvency became unavoidable.”
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