Fully booked

Booker is now firmly focused on its customers after its long-running takeover saga. John Porter meets Hans Kristian Hustad - the new man at the helm.

Pub quiz time - what does every licensee operating a freehouse, leased or tenanted pub have in their wallet? a) An unpleasantly-worded final demand letter from the VAT man? b) An appointment card for an osteopath in order to deal with the consequences of lugging barrels about in the cellar? c) A Booker Cash & Carry card?

While a) and b) are both entirely possible, the answer we're looking for here is, of course, c). Outside the managed sector, every pub in Britain is Booker's customer, active or otherwise - and the company has plans for the managed players too, more of which later.

For a company which has, from time to time and probably with some justification, been criticised for concentrating too much on retailers at the expense of its catering customers, Booker is certainly in no doubt about the importance of the pub market to its business. Marketing director Mark Collier reels off the facts: "Catering customers account for two thirds of our business compared to retailers at one-third. And pubs are the biggest single group within that. So it's a vital market for us."

The strong message from Booker is that there is a renewed focus on the front line and a drive to revamp and upgrade the support package offered to licensees. The business has been through a fair amount of turmoil over recent months.

After five years as part of the Big Food Group, the somewhat awkwardly-assembled conglomerate that lumped Booker together with frozen food retailer Iceland and delivered wholesaler Woodward, Booker is back out on its own.

The consortium which acquired Big Food in a £363m deal at the start of the year, led by Icelandic investment group Baugur, has split it into the component parts.

While the 173-branch Booker operation is once again a distinct business in its own right, that's not to say that everything in the garden is rosy. In its last trading statement, issued in January, Big Food revealed an accelerating rate of like-for-like sales decline at Booker, down by 4.3 per cent in the last three months of 2004, and down by 4.6 per cent over the five-week Christmas period.

Over the second half of last year, the combination of grocery price deflation and increased competition in the convenience retail sector, as well as a decline in sales to the catering sector, hit Booker, and in the very tough current retail market, there's no reason to assume that things are going much better.

However, the business now has its destiny in its own hands and the new owners are clearly firm believers in the "experienced-hand-at-the-helm" theory of management.

Years of experience​

New Booker chairman Hans Kristian Hustad, 55, brings 31 years of experience in the food and grocery industry to his new role. In his native Norway he was managing director of Dahls brewery in Trondheim and later deputy managing director of Ringnes brewery.

Ringnes is now owned by Carlsberg and, interestingly enough, at a time when then the Iron Curtain was still firmly in place, Mr Hustad led the overtures to USSR breweries which ultimately led to the creation of the Baltic Beverage business - now jointly owned by Carlsberg and Scottish & Newcastle.

Based in Poland, he was involved in the building of two Coke plants in a joint venture with the US soft drinks giant and has been a non-executive board director of Baugur since it was established in 1998.

There's certainly nothing in that CV to apologise for but, nevertheless, Mr Hustad - or Hans Kristian as he insists on all his new colleagues calling him - starts on a contrite note. "We know we have to apologise to publicans for the problems we've had with availability recently," he says. "It hasn't been good enough and we're determined to put it right."

The problem was caused by a combination of a systems upgrade and the inevitable inward focus of the business during the change of ownership. Availability has been running at about 97.5 per cent in Booker branches. That may not sound too bad, but best-selling lines tend to be the ones that run out first.

While it's too early to be drawn on the levels of availability Booker is targeting - "you aim for 100 per cent but there will always be some problems," says Hans Kristian - the immediate focus is on ensuring availability of the most popular lines.

Alongside that, Booker is putting in place a number of other initiatives squarely targeted at pubs. The new Weekly Specials for Caterers promotion is designed to counter criticism that too many of Booker's deals have been more suited to retailers. Launched at the start of this month, it includes ambient, fresh and frozen food and non-food lines, and promises to take into account seasonal events.

Initially at least, it has clearly stuck a chord, with 15,000 customers taking up the offers in the first week, and a 350 per cent sales uplift on the promoted lines. Mark Collier says: "Weekly Specials for Caterers follows in-depth research to find out how Booker can improve its service to caterers. It showed they wanted regular promotions which focus on the products they need the most."

Many Malt House Vintners products from Booker's range of wines, beer and spirits are also regularly discounted as part of the weekly Blockbuster deals and four-weekly on-promotions offers.

In addition, the Booker Express next-day delivery service - started last year - is to be rolled out to more branches after a successful trial at 50 outlets. Free for customers within five miles of the depot who order goods worth £200 or more, the average Booker Express order actually comes in at more than £350.

"We see the top-up order market as potentially very important to us" says Mr Collier. "When pubs run out of something, they need to know it can be delivered quickly and reliably." Adapting Booker Express for managed pub groups, by setting up central accounts and allowing individual outlets to place orders without cash changing hands, is also firmly on the agenda.

"Overall, we're cutting back on employee numbers - particularly at head office - as we restructure the business," says Hans Kristian, "So it's important to point out that the one area where we're increasing the head count is at the front line where we're supporting catering customers with more catering managers.

"Pubs are a very important market for us and we're determined to get the products and levels of service right."