Shopkeepers are re-examining their supplier and wholesaler agreements after a wave of company collapses and shake-ups hit the convenience sector, and experts say there is more to come.
Alcohol wholesaler and Bargain Booze partner Conviviality, and fresh and chilled delivered wholesaler Kerryfresh both went bust, while Zapper axed 80% of its staff and halted rollout plans, and Blakemore announced it is attempting to offload its struggling wholesale business.
Assigning blame for Kerryfresh’s demise, its administrators fingered debts and insurance issues caused by the fall of Palmer and Harvey (P&H) and high street retailers, highlighting the domino effect predicted by former Bestway operations director David Gilroy, who said at the time: “The big companies can stand a hit, but for smaller businesses, it is make or break.”
Gilroy added that every wholesaler and major retailer collapse makes it harder and more expensive for suppliers to insure their goods, ultimately adding pressure to the supply chain.
This was supported by a source at another supplier forced out of business by P&H debts, who told Retail Express: “I know of several other suppliers who are also on the brink because of these debts.”
Asked about further market disruption, Martin Williams, former managing director of Landmark Wholesale said: “Margins in wholesale are so small now, there’s no margin for error and it can’t continue like this. One bad debt, one lost customer is all it takes to create a substantial risk.”
Julian Taylor-Green from Taylor-Green’s Spar in Hampshire agreed and said retailers have a role to play in ensuring the survival of their wholesale partners. “We have to help change how wholesalers work, and that means being more disciplined and more supportive of our symbol groups to give them the power to negotiate,” he said.
Other retailers told Retail Express that they are looking to build alternate supply routes to secure their business from supplier and wholesaler issues. Andrew Brown from Marsden Stores & Post Office responded to the news stating: “All you can do about these external threats is have another supplier ready to step in if needed.”
Kamal Thaker from Stop Shop News in London said: “It’s worrying just how much further the number of players in the wholesale market can shrink. We are looking for suppliers that are willing to take to the road themselves like Walkers did after P&H in order to support the small independent retailers.”
Read more: Experts say over ambitious expansion behind Conviviality collapse