Plea for more price-marked packs for independent shops

15 June, 2007

Wholesale boss says tactic would restore value to hard-pressed market

Suppliers should invest more in price-marked packs for the independent s

ector, according to Today's Group senior trading controller John Baines.

Baines said more investment in price-marking would help put value back into the supply chain and help wholesalers.

"The wholesaler is the link in the chain who makes next to bugger all. I'm not having a pop at the supplier or retailer, but looking for an alternative.

Suppliers and retailers are making considerable margins on their brands. Duty fraud has driven prices down. We need to find a way of bringing value back to the wholesaler," he said.

Speaking at the Federation of Wholesale Distributors' Drinksummit conference, Baines said prominent price-marking should be extended across the chain from suppliers to non-aligned independents to create price stability and increase value.

Price-marking would help to stablise the difference in pricing between wholesalers and multiples, Baines said, but he warned the tactic would not work unless margins are profitable throughout the supply chain. "A shared margin of 20 per cent is never going to work, it will only serve to reduce sales," he added.

Baines suggested wholesalers would look to make a minimum £1 margin on a £12.99 price-marked case of 24x50cl beers, and also said suppliers should produce more bespoke packs for the independent sector, such as 50cl Scotch.

He also said suppliers should spend some time shadowing a delivered wholesaler. "A significant number of suppliers look at margins from a retailer's perspective. Some of you are thrown into the sector with insufficient training, you are left to train yourselves. Spend a few days with a delivered wholesaler and it will change your perception of the costs involved. Even those who have been supplying wholesalers for years would benefit from getting their hands dirty. This exercise will convince you of how much more volume there is to be had out there."

More lateral thinking could help boost profitability, Baines said. "What about suppliers paying a £1 service charge for every case they sell in an independent retailer, or, for every case sold at wholesale, all suppliers donate 50p, and the money paid at Christmas to all destitute wholesalers across the land?"

Baines concluded: "I know that margins will need to vary by category, but the guy that gets your products on to the shelf needs to make a profit. Give it some thought and ask the question: what's in it for me?"




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