Our Forecast for 2015

It’s been an interesting year for wholesale and foodservice sector in 2014 with a strong performance and little of the drama that has forsaken the supermarket industry this year.

The year has been one of transition from the traditional cash and carry model to one being dominated by internet and click and collect sales. We see this trend continuing into the next 5 years with steady growth year-on-year.

With internet sales having reached over £1bn this year with big contributions from both Booker and Bestway, the convenience of ordering online is becoming a stable feature for customers. This still only represents 4% of the overall market, and so there is still room for much further growth to be seen in internet sales sector. We forecast the market grow to 10% within the next 10 years.

Mobile apps have also started to emerge with a new app created by Bestway as one of the first apps in this sector. Time will tell as to how popular mobile ordering will become, but we forecast that it will continue to grow as smart phones become a mainstay of the ordering market.

With all this online presence continuing to grow, data will become increasing more important with savvy wholesalers making decisions based on the data that they have in real-time to target new and existing customers with special offers etc. We see the emergence of data as the next big change in wholesale and the wholesalers who can adapt the quickest in the next 5 years, will enjoy the biggest growth.

We also see the market becoming more and more competitive as the discounters enter the convenience store market. With lower prices and a different range of brands, market share will be lost to the discounters which will have an added affect on wholesalers too.

Overall, we see opportunity in 2015 for wholesalers to adapt further to technology through online websites, mobile ordering and employing big data techniques to engage customers and refine their price strategies going forward. Those that can adapt the quickest to changes in the market will have a competitive advantage in the coming years.

We wish you all a Happy New Year and prosperous 2015!

Supermarket Price Wars Affect on Food Producers and Wholesalers

It’s been no secret that there’s a price war going on at the moment between the major supermarkets due to the attack from the discounters. This may be good news for consumers, with lower prices in store and deflation of food and drink prices, but not so good news for the food producers.

Research from Moore Stephens has shown that 146 food producers went into administration this year, compared to 114 last year, which is a worrying sign.

With the supermarkets putting added pressure on supplier costs, this has meant that the margins made by the supplies are far less than before, and can tip the supplier into administration. This coupled with the long payment terms of the supermarkets means that the suppliers have a cashflow problem, and end up running out of cash.

Are we due to see the effects of this in the wholesale market? At the moment, there may not be a price war waging between the wholesalers, but the food suppliers also supply to wholesalers and food service companies too. Thus, with fewer suppliers in the market and less competition, this may lead to higher prices in the future too.

It will be interesting to see how prices will be affected in 2015 with fewer food suppliers, and the impact of the discounters moving into the convenience store sector too. 2015 will certainly be an interesting year in the wholesale market!