Opportunity knocks

CASH & CARRY operators are being squeezed at both ends by the supermarkets - but pubs and other catering businesses could be the unlikely beneficiaries.

The cash & carry sector's traditional independent retailer customer base is dwindling rapidly as they continue to be stalked by the likes of Tesco and Asda. And those supermarkets are the very businesses, according to new research, which are squeezing cash & carry operators at the other end by attracting a growing number of their catering customers.

The Cash & Carry Caterer Tracking Programme from market research firm him! suggests some simple things that cash & carries can do to win more business. And it is pubs which could be the real winner as they get a better targeted service from the likes of Booker, Makro and other operators.

Among the conclusions of the report, which follows interviews with almost 400 publicans outside 150 different cash & carries across England, Scotland and Wales, are:

• More than half (53 per cent) of publicans source products from supermarkets, buying an average of 21 per cent of their needs there
• As well as cheaper prices, licensees would like to see better availability in cash & carries, with a third failing to buy something on a trip - mainly due to out-of-stocks
• One in four (27 per cent) publicans say they never change their menu or do so less than once a year, suggesting that they need more advice
• Publicans usually spend an average 25 per cent more than they intend to in the cash & carry, shelling out an average £285 per visit.

What the research doesn't tell you is that more than one in four publicans aren't using cash & carries at all, according to The Publican's latest Pub Food report. The message is clear - if cash & carries can do more to appeal to pubs there are some big wins to be had.

Missing a trick ​

As him! director Tom Fender remarks: "There's a real opportunity for cash & carries to work closer with pubs and give them advice.

"For example, all the evidence is that catering customers, including publicans, like suppliers talking to them in the branch when they are shopping at the cash & carry - they haven't got the time to engage with them on their own premises. Operators should be getting more suppliers in to give demonstrations about consumer trends and new product launches."

With one in four licensees serving food rarely changing their menus, this would also help them develop their food offer, Fender points out.

Cash & carry operators need to look closely at the sort of reasons why many licensees often seem to prefer the supermarket as the top-up shop, he says. "Maybe they are using their online delivery service, or maybe they just think that a 35,000sq ft store is actually pretty convenient for them," continues Fender.

"For example if they want to just buy a few things, it will be much quicker to queue up at an express checkout in a supermarket, rather than go to a cash & carry. It won't take them too long, they can buy things in minimum quantities rather than having to buy a case, and there's often even 24-hour opening if they want it.

"Cash & carries need to recognise that a lot of their customers - or their potential customers - just want to buy a few things," he adds.

"Maybe they should introduce a till for five or six items - and take a long-term loyalty view, rather than one that's all about short-term profits," comments Fender.

The sector's biggest operator, Booker, recently made a big move in the direction of pubs by announcing its plans to target more licensees by selling kegs of ale.

But all cash & carries would win more business from the pub trade if they started giving their customers what they want - which is actually the sort of philosophy which has turned Tesco and the other major supermarkets into the retail giants that they are today.

Do you use a cash & carry?​

Dorothy Simmonds, licensee, the Red Cow, Reading: "I use Makro and Booker for everything from bacon and cheese, to cleaning stuff and spirits. You can go round and browse at your own convenience. It's all laid out for you, and it's easy to compare one with the other.

"Supermarkets do have more offers like two-for-ones, but it's only ever in small quantities. It's easier to buy in bulk from cash & carries. "I often spend more than I intend because of the VAT."

Robin Twigge, owner, the Park Hotel, Norfolk: "I am put off cash & carries by the inconvenience and time. You have to be so careful with their prices. You are up one week and down the next.

"The quality of the products is not up there with supermarkets or other suppliers. I always look at their meat and wonder where it has come from.

"Makro approached me recently though, and offered to match my liquor prices, which I was very impressed by. I said to them if they could do delivery, I would consider it."

Richard Cross, licensee, the Fox and Hounds, Tugby, Leicester: "Booker is great for everything from the butcher's, to fruit and vegetables, to bread, to cleaning products. If you purchase it yourself, you are always going to be saving.

"My delivery man had a block of cheese for £16.25 the other week. The same brand was on offer in Booker for £11. Cash & carries understand what the licensed trade is looking for. You couldn't find something like strip loins in Sainsbury's."

Richard Slade, licensee, the Magnesia Bank, North Shields, Tyneside and chairman of the BII North East: "I buy from cash & carries, vegetable wholesalers, and Tesco. For the basics, cash & carries are usually very good, but for sophisticated menus and fresh ingredients, they don't fit the bill.

"Cash & carry is available when you need it, rather than relying on deliveries, which is especially important in rural areas."

Key findings​

• Among the cash & carry visitors, most were single-pub publicans, with an average 63 per cent wet sales
• Six per cent said they changed their food menus every day. A further 13 per cent do so weekly, but 27 per cent say they never change their menu or do so less than once a year
• More than half (53 per cent) of publicans said they sourced products from supermarkets, buying an average of 21 per cent of their needs there. Most said they used supermarkets for convenience and for their fresh foods
• The top-selling lines bought from a cash & carry by publicans are: alcohol; cooking aids and sauces; and dairy
• Publicans are happy to buy cash & carry own-label cleaning materials (36 per cent do so in a three-month period) and condiments (26 per cent)
• Publicans arrive at a cash & carry intending to spend an average £228 on the trip: they actually end up spending £285 (25 per cent more than intended). The average publican spends £15,350 per annum in their cash & carry
• A third of publicans failed to buy something on their trip to the cash & carry - mainly due to out-of stocks
• 29 per cent of publicans bought something on promotion. Far more important than price was availability (76 per cent), and fast and friendly service (38 per cent).