What’s new in wholesale for 2019?
With Brexit reaching its conclusion (allegedly), several big names settling into new roles and an array of other key issues on the horizon, the next 12 months are big ones for wholesale. But what do some of the industry’s top names expect to be the big talking points for the year ahead?
DAWOOD PERVEZ, MANAGING DIRECTOR, BESTWAY
“With the minimum wage set to increase and the implications of Brexit still uncertain, there’s no denying that 2019 will be tough. However, the falling high-street rents, business rates relief for small businesses, duty rises on wine and tobacco, and minimum pricing on alcohol will help to make the market a more level playing field, which is a huge positive for independent retailers.
“Convenience shopping is on the rise. At Bestway our industry-leading approach and adaptation to industry needs has led to our results being +7.9% (excluding tobacco on a like-for-like basis up to end October 2018). To be successful, retailers need to stock the products consumers are looking for at all day-parts and to become destination stores, providing hot food-to-go, high-quality coffee, and meals for tonight. The range retailers stock needs to work hard to avoid retailers having cash tied up, and Bestway supports its retailers by providing expert category advice throughout the year.”
JAMES BIELBY, FWD CHIEF EXECUTIVE
“Next year is all about the aftermath of Brexit, although at this point we’re still in the dark as to where we’ll stand in April. If there’s no deal with the EU, we’ll have to negotiate the complicated transition to global WTO trading, which will inevitably include higher tariffs on some goods. Once the decision is known, we’ll be pushing for clarity on movement of goods and labour, and any departure from EU regulations and standards.
“There’s plenty of other regulation to be aware of too. A rise in the National Living Wage in April will hit some wholesalers hard and they’ll benefit less from business rates relief than their customer base. The new duty bands on white ciders will affect many own brands, and Minimum Unit Pricing of alcohol products will come into force in Wales.
“We’ll learn about calorie-labelling requirements due in 2020, and may see a ban on sales of energy drinks to children. On the environmental front, we face some potentially very onerous changes to Packaging Recovery Notes and the first of what’s likely to be numerous restrictions on the use of unrecyclable plastics.
“As the wholesale sector’s representative body, FWD will be making sure its voice is heard as these policies evolve into legislation, and we’ll make sure that our members know what’s coming their way and how they will need to adapt their businesses.”
NEIL TURTON, SUGRO MANAGING DIRECTOR
“I recently returned to the industry as Sugro’s MD after 18 months with the co-op movement. The amount of change and consolidation has been immense – not only with Booker and Tesco, but also the major multiples now seeing themselves as wholesalers to fuel capital-light sales expansion as customer trends move away from their big-box model.
“A lot of these changes started in 2018 but will take greater shape and form in 2019. Wholesale is not defined as narrowly as before. This poses challenges for suppliers and wholesalers as channels blur.
“For Sugro, it’s a year ahead of positive change to meet these challenges. With a complete shift in our marketing, we are focused towards innovation and excellence. We will not be the biggest, but we strive to be the best. Personal service and relationships between Sugro and members, and members and their customers will be vital too. Big data may be valuable but we are still a people industry and Sugro will be ensuring we thrive, based on innovation and relationship strategy in our key impulse categories.”
TERRY LARKIN, GROUP GENERAL MANAGER, JJ FOOD SERVICE
“Over the years, we’ve moved from being a foodservice wholesaler to a true business partner to independent caterers. We offer them key services from catering supplies to online-ordering websites and even customer credit via the JJ Mastercard.
“This month, we’re celebrating our 30th anniversary, which is a tremendous achievement for an independent family business, and we plan to be around to support our customers for many years to come. That’s why one of the biggest focuses for us in 2019 will be to continue with our environmental push. This year, we made some great leaps, which included reduced idling in our vehicles by 70% that resulted in a 2% reduction in carbon emissions across our entire fleet. Solar energy now accounts for 13% of all energy used by our London branches and all our sites are MSC certified. We are encouraging the use of biodegradable and compostable packing with our new Eco-Packing range and will continue to grow our vegetarian and vegan offer.
“We believe that we have a role to play in helping our customers to make environmentally friendly choices. We are proud of our achievements and were delighted to be recognised at the FWD Gold Medal Awards, where JJ Foodservice was shortlisted for the Green Wholesaler of the Year Award.”
DARREN GOLDNEY, MANAGING DIRECTOR, UNITAS WHOLESALE
“I certainly think there’ll be an advancement in digital business. I don’t mean just the percentage of transactions, but the level of influence in digital on retailers’ behaviour will increase. I’d also imagine that we’ll see this extended into the foodservice and on-trade sectors, which is quite limited at the moment. So some of the best practice we do about range and execution that are commonplace will start to happen in in those sectors too.
“There’ll also be pressure on cost, regardless of what happens with Brexit. There’ll be more consolidation of effort to take out cost and that’s something Unitas Wholesale wants to do too.
“It wouldn’t surprise me if more multiples formally develop wholesale arms as their footprint dries up in terms of not wanting to put more space down and more business goes to home delivery. I think we’ll see more models like Tesco developing, to compete with and supply the remainder of the independent sector.”
HUGO MAHONEY, UK CEO, BRAKES
“The short-term challenges for the foodservice industry are significant, and we’ve seen national restaurant operators and independent businesses alike struggle. Brexit dominates, with challenges on labour availability, food inflation, and lower sterling rates.
“However, we remain positive in the medium-term outlook and are investing accordingly. We’ve been planning for a range of scenarios to ensure that Brakes is best placed to help our customers meet the challenges that are to come.
“Consumer demand for eating out, particularly in areas such as healthier fast food and food to go, remains strong and vegan and free-from choice expands rapidly – giving growth opportunities. Consumer consciousness of social and environmental issues, food provenance and lifestyle choices influencing meal occasions continues to rise.
“This will require new behaviours and partnerships to meet demand and, simply, because it’s the right thing to do.”