Wholesalers Improving their Online Experience

We have recently seen that wholesalers have started to improve their websites and online experience with new websites being launched over the last few months.

We first saw JJ Food Service with a newly improved website, closely followed by A to Z Catering and Nila has now launched their new website last week too. All the websites look much more slicker than before, with sharper photos and better user experience for the customers with an easy to use basket system.

Is this the way shape of things to come? We certainly think so and believe this has been long over due. Wholesale traditionally has been slow to adapt to the internet with user experiences we take for granted today, and we believe this adds momentum to purchasing online with the trips to the cash and carry becoming less and less frequent in the future.

Buying online has its advantages for the wholesalers. Firstly, there is less reliance on taking calls over the telephone, which means employing less staff in the call centre. Additionally, the orders are more accurate online as the user has put their own order into the system which equates to fewer incorrect orders.

Additionally, with more orders made online rather than customers coming into the store, less space is required for the depot and hence money can be saved in rent if the business.  For a lot of wholesalers, the land is bought freehold and so this doesn’t make such a big difference apart maintenance costs can be reduced as a result.

Once the wholesaler is online then there is the new task of attracting customers to the site. This involves SEO, optimising the site and conversion rates, as well as not losing any customers prior to the purchasing phase. This is a completely new area for the wholesaler and we recommend seeking expert advice in this.

It is great to see that the wholesale market is moving online with enhanced user experiences and we look forward to further advances in the near future too.

Food Suppliers Fear of Being Bullied by Supermarkets

Christine Tacon, the Groceries Code Adjudicator told peers yesterday that the watchdog had found it difficult to get suppliers to come forward with evidence of breaches of code of practices.

Thus, it appears as though the suppliers are all scared of being black listed and facing a potential loss of business if they tell about the current business practices implemented by the supermarkets. This has been further evidenced by the YouGov poll that says that 58% of suppliers feared retribution from the supermarkets.

Does this happen in the wholesale industry too? And if so, what can be done about it?

Typically, there is more competition in the consumer grocery business from the supermarkets than in the wholesale industry. The main reason is that the size of all the wholesalers varies, from very small wholesalers to the largest which is Booker, with £4bn sales. This is predominately cash and carry goods which are all branded products and so part of big manufacturing companies anyway.

Smaller food suppliers who supply the catering distribution companies like 3663, Brakes, Fresh Direct etc are squeezed on prices, but the products get absorbed into restaurant, café food etc and so the prices are not advertised nationally. The end consumer does not get to see the prices of tomatoes, cucumbers etc. and only sees the prices of the sandwiches, baguettes etc. which makes it less transparent. Hence, there is not a big price war on the supplier side.

Thus, we do not anticipate a similar supplier squeeze to the supermarkets in the wholesaler industry and although suppliers will be squeezed to some extent, but not to the extent of that being faced by the supermarkets.