In the latest chapter in the symbol market’s era of consolidation, Bestway’s rescue plan for the Bargain Booze chain includes clear communication, stable supplies and expanding ranges beyond stores’ alcohol and tobacco heartland. Managing director Martin Race gave his first interview on the deal to Tom Gockelen-Kozlowski
In these uncertain times for the supply chain, good news is a precious commodity. So when late last week, Bestway stepped in to acquire the stricken group Conviviality Retail – securing the future of 769 stores and 2,300 staff – there was an understandable sigh of relief in many quarters.
Martin Race, managing director of Bestway Wholesale, admits that there hadn’t been any plans to acquire Conviviality before its search for an administrator began but describes the purchase as an “excellent fit” for Bestway.
“Conviviality represents brands who place a strong focus on supporting and servicing the needs of local communities, just like Bestway has done for over 50 years,” he tells RN, making his first public comments since the move.
And with stability now seemingly achieved for the group, Mr Race wants to quickly move on, finding areas where Bargain Booze retailers can improve their model with Bestway’s assistance.
“Uncertainty is never a good place to be. People don’t invest when there is uncertainty and stores have to invest just to stay still these days. We will be able to bring stability to retailers and the scale to make them greater profit. Also, in terms of store development we will be looking at the overall potential of stores as many Bargain Booze customers were perhaps too reliant on alcohol and tobacco,” he says.
One common criticism of Conviviality during its period of crisis was that retailers were often left in the dark. Although Mr Race says he understands the reasons for this, he is now focusing on improving communication.
“It’s always the same when a company is in trouble. The main aim is to try and keep the business going or find a buyer rather than share what’s happening with retailers. To an extent this is understandable, but you should never lose focus of your customers. One of the first things we did was to draft communications to retailers which are being sent out to our new store.
“The main thing is to reassure retailers and you can’t do this unless you talk to them. Through field staff at both companies, we will be informing retailers of our plans as and when they are confirmed.”
Considering the numerous reports RN has heard of Bargain Booze retailers looking to move away from Conviviality as its troubles grew in recent weeks, this communication can’t come quickly enough. So, what is Mr Race’s message to those retailers already searching for a new partner?
“Our message is clear – we will get them back on an even keel, get supplies into their stores and work with them to ensure they retain footfall and sales.”
Just months after the collapse of P&H, Bestway has once more been a point of stability in a swirling market. Although Mr Race warns against comparisons between the last few weeks’ travails and those at the end of last year, the company has nonetheless been ready to assist any store affected by issues at Conviviality and Blakemore and the demise of Kerryfresh.
“The trade hasn’t come together in the same way because P&H was a much bigger crash, but we have tried our upmost to help affected retailers.
“The main issue is to keep supply going. Shoppers will give stores some leeway if they know what’s happening but not too many chances if shelves are empty. You can’t sell fresh air, so the main thing is to get supplies to retailers,” Mr Race says.
Yet, while Mr Race describes his business as “a safe pair of hands” the company has also had to be fleet-footed to survive in this era of consolidation, increased costs and low margins.
“The Conviviality deal will give us greater scale and volumes. It is the margin mix that is important rather than single low margins in any particular category [which can put pressure on businesses] and we will work with retailers to make sure they get their margin mix right.”
Mr Race will also not comment on the rumours that Bestway will step in and purchase Blakemore’s 12 wholesale depots, but the acquisition of Conviviality suggests a new growth strategy for the company as it looks to compete long term with behemoths such as Booker-Tesco and Co-op/Nisa/Costcutter.
Martin Race is adamant that Bestway is not actively seeking opportunities to grow faster, however, and makes some pointed criticism towards the strategy Conviviality had taken in recent times:
“You only have to look at Conviviality and P&H to know that big is not best. We have been in wholesale for over 40 years and look to be in it for many more. We will follow our own strategy for growth looking to support all customers be they retail, catering, contracts or pet specialists and if an opportunity comes up which means we can get stronger – rather than bigger – then we will look at it.”
It has been yet another remarkable few weeks for the wholesale industry and, by association, the future of independent retail. Martin Race is hopeful, however, that the era of consolidation that began when Booker announced its merger with Tesco in January 2017 is now coming to a close.
“I hope it is,” he says. “I’m not sure the industry can take too much more and for the sake of shoppers and suppliers we need to stabilise the sector, so we can maintain confidence in the sector. Also, the targets for consolidation are becoming fewer and fewer.”
Whether or not this is the end of consolidation, there will be many grateful to Mr Race and his colleagues for the security they have brought to their stores and their jobs.