The Federation of Wholesale Distributors (FWD) has commissioned a study into the contribution made by the independent supply chain to the UK economy.
The study, which is to be carried out by Capital Economics, will be used to help educate legislators and the national media about the importance of the wholesale channel to employment and added value in the business sector.
Initial findings from the report were outlined by Capital Economics’ head of projects Mark Pragnell at the FWD’s annual conference in Burton-on-Trent last week.
Citing the number of photocalls and visits that senior politicians make to the big four multiples, he argued that “the establishment easily forgets about a sector with lots of independent stores, and it is important as an industry to demonstrate your value to the media and opinion-formers”.
Provisional results indicate that the wholesale industry has a £30bn turnover, but is also the source of a value chain worth a total of £36bn when you take into account the spending that suppliers can make as a result of wholesalers purchasing their products. The sector also sustains 130,000 supply chain jobs directly, and more than half a million jobs in total when you include those in independent retail and foodservice, which overall makes it a bigger contributor of value than Tesco. The full study will be launched in the Autumn.
Angus Mcdonald, vice president of sales at PepsiCo, agreed, saying: “The opportunity within the wholesale/convenience sector is huge. We are at a unique point, as the top four grocery retailers account for 75% of the market but are losing share, and a huge part of suppliers’ resources are allocated to low growth and no-growth sectors.”
Whereas once the power in the sector used to be with brand owners and then with large retailers, the industry has entered a new phase where power is with the shopper, McDonald noted, so the challenge for the supply chain is to follow the shopper through technology and user-friendly shopping experiences.
At the same event, Katie Hemmings, commercial director at HIM Research & Consulting, challenged wholesalers and suppliers to use research to help retailers fulfil their needs more efficiently when purchasing from cash and carry depots.
A recent HIM study of customer shopping habits in wholesale showed that most retailers restock on Mondays and are more likely to make distress purchases on Mondays and Wednesdays, while 44% of incremental sales were achieved at aisle ends, with only 5% by the entrance and 9% by the till point. This knowledge gives suppliers the opportunity to time their reps’ visits better, and to create visibility of products within depots at the optimum times, she added.