Wholesalers must keep focused on independent retailers and not make the same mistake as Palmer & Harvey in prioritising multiple accounts.
This is the view of Darren Goldney, the new Today’s Group managing director and former commercial director of P&H, which entered administration last week.
“You’ve got to keep focused on that independent customer because while the number of independents is in decline, they’re there, they’re vibrant and they’re looking for similar minded businesses that can serve them,” he said.
Mr Goldney said P&H had “taken its eye off the ball”. “Its business changed quite dramatically to a distribution-led company with wafer thin margins and it also changed to have quite an inflexible approach,” he said.
Large costly minimum order drops and broad delivery times were symptomatic of an approach that did not serve independent retailers well enough, he concluded.
But, Mr Goldney said independent retailers who are more used to shopping around have an advantage over multiples in sourcing core lines like tobacco, following P&H’s collapse.
“Independents have a lot of choice of where to buy, but P&H supplied a lot of multiples who are used to one route to market with one price." He added that the Today’s Group is supporting retailers looking for a new supplier with range guides on tobacco and confectionery.
Meanwhile wholesale expert and managing director of Store Excel David Gilroy said the collapse of P&H should serve as a warning to wholesalers who are operating at an unprofitable level.
Charging for delivery or transforming pricing structures will be part of the fallout, he believes.
“Many operators are not being commercial in a hard-nosed way. There are lots of hidden costs in delivering to retailers – things like security and the profitability of the mix of goods, and all those costs need to be worked out,” he said.
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