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Two UK convenience retailers are trialling mobile payment apps to improve the shopper experience.

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Following the announcement that the UK's largest delivered wholesaler Palmer & Harvey is now in administration, PwC, the administrators, have advised the company's customers that it cannot provide any further wholesale service and that even orders placed before the administration cannot now be honoured.  Therefore customers "will need to arrange an alternative source of supply going forward."  With sales of £4.4bn from a customer base numbering up to 90,000 retailers and institutions, the resulting redistribution of business-to-business supply is perhaps one of the biggest short-term upheavals ever seen in the UK wholesaling sector, and as such the opportunities for other wholesalers are considerable.

Not all the £4.4bn likely to be 'wholesale accessible'

Amongst Palmer & Harvey's broad customer base is included multiple grocery retailers such as Tesco and Sainsbury's using it mainly as an outsourced specialist distributor of tobacco.  Accounting for an estimated 60% of total company sales it seems likely that this element of the business can be quickly diverted through in the in-house supply chain/logistic functions of these very big customers, and thus the opportunity for wholesale competitors will be limited here.  However, in contrast those many smaller customers without their own supply chain resources will be looking to third party wholesale/distribution sources to fill the gap.  As well as many small scale retailers (with only one or a handful of stores), this category of P&H customers does include some significant, even national, store operators such as McColl's, Esso, Shell and forecourt dealership MRH, and is worth up to £1.7bn on an annual basis.

Booker, Nisa and SPAR: key players in the delivery space

The obvious businesses for larger retailers, needing well-organised multi-site service, to turn to are Booker (in particular the Booker Retail Partners division), Nisa and SPAR all of which operate national delivered wholesale services, and all of which specialise in supplying convenience stores.  However, the scope that these wholesalers have for taking on significant new customer accounts at short notice is unclear.  Typically when new accounts are activated there is a gradual roll-out process with stores switching into the new supply network in manageable batches, a luxury not available in the current circumstances.  Thus while we will see these delivered wholesalers taking on former national account customers of P&H in due course (and of course Morrisons in the case of McColls), in the short term we are likely to see a wide range of ad hoc, short-term contingencies being put into place.

Key cash & carry players to benefit in the short term

The simplest short-term contingency for any smaller retailer will be to turn to cash & carry wholesalers, allowing ready access to stock by collecting it for themselves.  In these current circumstances with distribution arrangements needing time to set up (if only to establish credit facilities), even larger retailers are likely to be dealing with Booker, Bestway and Dhamecha (plus many others) on a cash & carry basis in the next few weeks.  National symbol group Costcutter, including some 2,200 stores has already sought to register all its retailers with local cash & carry depots to ensure access to stock over the coming weeks.  Meanwhile the wholesale buying group Today's has advertised to P&H customers that it is working with suppliers "to ensure upweighted stock holdings and key pricing on critical items in order for independent businesses to be confident in making their local Today's Group member wholesalers (which includes Dhamecha) first choice to support this change."  

Following the provisional approval of the Tesco/Booker merger and the vote in favour of Co-op/Nisa, major national symbol group SPAR UK has announced a renewed recruitment drive.  Flagging its recent growth and ongoing stability it aims to attract independent retailers seeking enhanced support to face the challenges of a changing competitive environment.

Sales up 6% in 2017

Revealing figures on a sixth consecutive year of growth, SPAR UK has reported that store numbers are already up 5% in 2017, driving increases both in wholesale sales to its member retailers and in retail sales to shoppers.  Forecourts continues to be a major focus for expansion.  SPAR is the biggest retail presence on UK petrol filling stations, providing the partner brand for stores on over 1,200 forecourts nationwide.

Format innovation to target stores above 3k sq ft

While providing retail solutions primarily targeted to small stores with an average sales area under 2,000 sq ft, SPAR UK has always had flexibility to support larger stores.  Under the EUROSPAR fascia the national network includes a number of small supermarkets up to 5,000 sq ft.  Now SPAR UK has launched a new concept for these large stores under the SPAR Market banner.  The updated format, now live at Y Maes, Pwllheli in Wales, includes a host of new features such as fresh bakery, a fresh pizza counter, self-serve hot and cold food-to-go, and orange juicing machine and dry-ageing meat cabinet.  Operated by established local retailer, Conrad Davies, the new store has been designed specifically to provide scope to showcase local produce and suppliers.

Ian Taylor, SPAR UK Retail Director commented:

'We offer independent retailers a highly profitable business model, which meets the needs of the changing customer, as well as offering independence and entrepreneurialism; and we encourage our retailers to build businesses that are hugely valued in the community.  We are ready to move the convenience sector to the next level and bring independent retailers a bright and exciting future.'

Hold the date - IGD's Convenience Retailing Summit 2018 26 - 27 September ...

In a new two-day format IGD's annual convenience event will bring insight on all aspects of the sector from store formats to route-to-market, register your interest here to stay up-to-date on the programme as it builds.

In October, SPAR UK launched its first payment and loyalty app in partnership with Zapper. The retailer also unveiled the first phase of its own-label wine campaign.

New mobile payment and loyalty app with Zapper

SPAR UK has launched its first mobile payment, loyalty and voucher app with Zapper. The Zapper app is already in use in a few selected stores around Plymouth and Exeter. It is due to be rolled out to a number stores in the South West before rolling out elsewhere. The app allows customers to pay for their shopping and collect loyalty points by scanning the QR code at payment. Voucher redemption and loyalty card updates are processed instantly through the app.

SPAR UK’s retail director, Ian Taylor, said: “We are focused on offering excellent customer service. Working with Zapper means that customers are motivated to shop at SPAR rather than a competitor store.”

Two new own-label wine ranges

Also this month, SPAR UK unveiled the first phase of its own-label wine campaign with the launch of two new ranges: ‘Everyday Drinking’ and ‘Varietals’. The ranges make selecting wine easier and more accessible for shoppers. Both ranges have simple but effective labelling, clearly displaying the type of wine.

The Everyday Drinking range targets shoppers who are looking for a type of wine at a certain price point. It consists of five different types including Bold Red, Smooth Red, Crisp White, Fruity White and Fresh Rose, all costing £5.

The ‘Varietals’ range reflects the modern trends in wine and targets consumers who buy wine according to the grape varieties. The range consists of 12 types, retailing at £6, including Cabernet Sauvignon, Sauvignon Blanc, Merlot, Garnacha, Malbec, Pinot Grigio and others.

The launch is being supported by a marketing campaign including social media and newsletter coverage, as well as POS and display tools. Phase two of its new wine range will take place in spring 2018 with the launch of exclusive and regional lines. 


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Presentations

09/05/2018
In this report we look at how and why food-to-go operators are increasingly using partnerships to grow their business.
04/05/2018
We visited a SPAR in Dublin to see how BWG is developing its convenience proposition through its food-to-go offering.
24/04/2018
An essential summary of trading priorities, latest developments, and other key commercial insights for SPAR UK.
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Key presentation

This in-depth guide to the United Kingdom explores the key trends in grocery retail and the growth strategies of the leading retailers in the country.

An essential summary of trading priorities, latest developments, and other key commercial insights for SPAR UK.

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26-27 September 2018, London
Convenience continues to outpace big store formats. This year we have launched a two-day Convenience Retailing Summit to help you explore every opportunity, possibility and future trend to boost your business.

We've developed a single, universal methodology for calculating food and consumer goods retail data, supported by our programme of primary and secondary research. This makes Retail Analysis the most reliable and robust source available for data of this type. 

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