Creed Foodservice MD warns of wholesaler casualties
Creed Foodservice Managing Director Philip de Ternant says a number of foodservice wholesalers “won’t be here” in four weeks if the government fails to support the sector through the Covid-19 crisis.
De Ternant warns that without payroll support from Chancellor Rishi Sunak in this evening’s news conference, Creed Foodservice and other distributors won’t be able to afford to keep drivers on the road – many of who will be delivering to hospitals, care home and other public services.
With the majority of foodservice business affected by government advice to avoid restaurants, hotels and other entertainment locations, there isn’t the money for wholesalers to continue supporting public sector customers.
And if that happens, thousands of vulnerable people will be left with nothing to eat – a point FWD has been raising with government.
“It’s almost changing by the hour at the moment,” said de Ternant. “It’s frightening because there’s still this fear that [there isn’t the understanding in government that] foodservice wholesale is a different supply chain to retail. We’re a different supply chain and deliver to restaurants, pubs, hotels, garden centres and leisure. Our biggest account is National Trust and they’re closed this weekend.
“Everyone I’m talking to in the industry is down 60-70% of their normal turnover. A number of them are saying they don’t know how they’re going to keep to supply care homes or hospitals. I’ve picked up 67 care homes this week that can’t get anything.
“We’re unlike the retailers because we’re not taking cash. We give these hotels, restaurants and schools credits, so I’ve got customers that are closing saying they can’t pay for the goods we delivered in January and February, so I’ve got limited cash coming in, staff that are too high for the volume going out and I have wages to fulfil.
“We are hand to mouth at the moment – day to day, looking at everything we do. But without the announcement coming out this we’re somehow hoping will look after payroll, what does that mean?”
It’s believed that Sunak will reveal in his speech plans to release an employment and wage subsidy package, although the method of gaining access to that could have an impact on wholesalers, with de Ternant concerned the offer will be for businesses to take out loans.
“I don’t think anybody would be interested in a loan we’ve got a pay back in six to 12 months’ time – we need a grant. My payroll is £1 million and we’ve guaranteed to our staff they’ll be paid next Friday whatever” de Ternant added.
“Some will take the loan and look to the long term. If it’s a family business or shareholders, some PLCs will take the loss now, some would say they don’t want to work the next 20 years to pay this off and they’ll go. You can’t blame them.
“I can tell you, having spoken to other wholesalers, there will be some that won’t be here in four weeks’ time, therefore there will be no one to deliver to care homes, schools, hospitals or prisons. If we haven’t got the business going out and the cash coming in, and we haven’t got the support of the government, we can’t bankrupt our businesses.”
While de Ternant accepts that consumers will be flooding back to foodservice locations once the worst of the coronavirus spread has subsided, he says that won’t necessarily be enough to give wholesaler the shot in the arm they need to keep operating.
“We won’t have the cash to keep the business going,” he said. “If we haven’t got the cash coming in because customers aren’t paying us now, we’ve got no money to buy stock again to keep our warehouses full and pay our staff to deliver.
“Yesterday I’ve taken 20 vehicles off the road and taken another 10 off today, I’ve still got the staff but don’t have the deliveries. We’re doubling up until we know what the government’s going to do because we’ve got a fantastic team and our drivers are our ambassadors – if I can’t pay them for April, I have no other options.”coronavirus covid-19 Creed Foodservice Foodservice FWD Government wholesale