Supply in demand: retailers reaction to P&H collapse

Palmer and Harvey P&H truck retailers react
News RE Store management
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Palmer & Harvey entered administration on the afternoon of November 28, immediately suspending all business, tens of thousands of independent convenience retailers faced the prospect of empty shelves with nothing to sell.

Retail Express spoke to retailers and suppliers to find out how they’d been affected and what P&H customers can do to get their store back on track.

1. Stock shortages

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Retailers reported that cash & carries were overwhelmed by demand in the days following the end of P&H. 

Gaurave Sood, owner of Neelam Newsagents in Uxbridge, told Retail Express: “We went to Booker and the stock had been cleared out. I don’t think they anticipated the demand. They said it will take a couple of weeks to get it back.” 

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Avtar Sidhu

Avtar Sidhu from Sukhi’s Simply Fresh & Post Office in Kenilworth, Warwickshire, received more than 300 cases of chilled goods per week from P&H over three delivery slots. He said: “Trying to plug that gap has been a real struggle.”

However, Sidhu worked with other local independent stores to find a solution. By collectively placing orders, the retailers were able to meet high minimum order limits with other wholesalers and keep their shelves full.

“Don’t sit and wait to see what happens, take action to protect your business,” he advised.

Wholesalers and groups including JW Filshill, Nisa, Bestway, Today’s, Booker and Spar have all confirmed to Retail Express that they are working with suppliers to secure additional stock.

JW Filshill retail sales director Craig Brown said: “We are also working with suppliers to ensure availability of key lines over the peak festive trading period.”

2. Long-term planning

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It is not just Christmas sales at risk, but Easter and beyond too. Advanced orders on Easter goods have left retailers like John Vine from Newsworld in Church Stretton, Shropshire, and Avtar Sidhu up to several thousand pounds out of pocket. 

P&H administrators have advised anyone affected to call its dedicated helpline on 020 7804 7202. 

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John Vine

Several Costcutter retailers have also told Retail Express that they are considering switching symbol groups if a permanent solution can’t be found. One told Retail Express: “If they don’t keep the delivered wholesale coming, retailers won’t stay long.”

To help retailers who previously relied on P&H’s store advice, Today’s Group highlighted its free “Plan for Profit” system online, while Bestway suggested its online category management programme, which is available to all retailers.

A Booker spokesperson said that its team of merchandisers “are already helping P&H customers improve their stores”. 

3. Retailer Time Planning

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Cash & carry travel times are just a small part of the impact on store operations. 

Retailers reported hours spent changing shelf labels, arranging deliveries, restocking, remerchandising, developing new Christmas strategies and registering new product codes with EPoS systems. 

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Harry Goraya

Harry Goraya from Nisa Northfleet in Kent was unaffected by the news, but said other retailers were panicked and unprepared. “There didn’t seem to be many contingency plans, or any planning for the worst case scenario,” he said.

Spar retail director Ian Taylor said the company is ready to help.

“We’re completely focused on providing retailers with the best logistics service in the UK by offering 24-hour lead times, daily fresh deliveries and service levels running at 98% on fresh and ambient,”
he added.

Bestway said its field team had been “out in force” to return a sense of normal service to stores.

4. Credit lines

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Cash reserves ran low in many stores as they waited to pass other wholesaler’s credit checks to receive stock with deferred payment terms. 

Hitesh Pandya from Toni’s News in Ramsgate, Kent, said: “With the margins retailers operate on now, many large c-stores will struggle to fill shelves
without credit.”

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Hitesh Pandya

However, he said poor availability from P&H leading up to its closure had helped them prepare. Kent retailer Rajesh Nayi said: “We began to cut ties with P&H a year ago due to availability issues, so the impact on us was greatly reduced.”

Booker’s Premier brand director Martyn Parkinson told Retail Express that it has set up “a fast-track registration procedure” for new retailers, while Bestway’s MD Martin Race said it was managing credit and cash flow issues on a case-by-case basis.

At Today’s Group, retail director John Kinney said it was working on credit facilities to help retailers.

5. Replace unavailable lines

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James Woolsey from Scotch Street Filling Station in Northern Ireland may have only relied on P&H for 20 lines, but many can’t be sourced from anywhere else in the area. “They are key lines, especially for Christmas,” he told Retail Express. 

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Mehmet Guzel

For Mehmet Guzel, owner of Simply Fresh in Bethnal Green, London, the impact was even greater. He said: “Eighty per cent of lines we’ve managed to replace like-for-like, but 20% we’ve had to source alternative products.”

Wholesalers agreed that the best way to fill these gaps in the short-term is with core products for each category. “These are the biggest-selling lines and are the lines that will make the customers more cash profit,” said Parkinson.

Find out more about the Palmer & Harvey aftermath in our report on P&H customers sales dropping 6%.

What's happening to P&H customers?

They're reporting a 6% loss in sales.

Read more
By betterRetailing ⁣ Avatar
By betterRetailing ⁣ 07 Dec, 2017

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