A symbol group is often the favoured way to get support from experts while you get to grips with the convenience store trade, but it’s not the only way. Adhering to certain processes or fulfilling particular volume and ranging requirements might not be your idea of independent trading. Indeed it might make the freedom to trade how you wish without the constraints of a fascia seem more appealing.
But results from shopper research company Him’s Cash & Carry Retailer Tracking Programme reveal that just 2% of the 3,460 retailers spoken to at their cash and carry depot were forecourt retailers, indicating that the vast majority of forecourt retailers prefer a delivered wholesale supply. Are they missing out on some great deals, though?
Confectionery cash and carry Hancocks thinks so. Jonathan Summerley, senior buyer at Hancocks, says: "Many forecourts feel that they will save time by having their confectionery delivered to them. While they might save themselves an hour, they are missing some unique opportunities to add significant profit to their business."
Hancocks stocks in excess of 5,000 confectionery products, as well as a range of soft drinks and snacks. "Grocery cash and carries tend to hold a core range of confectionery, but if the forecourt trader sticks to this they are simply doing the same as everyone else, not enabling their business to stand out and not getting the greatest cash spend from each shopper," adds Summerley.
David Gilroy, controller at Bestway Cash & Carry Group, which also operates Batleys cash and carries, says that forecourt retailers can take advantage of favourable margins at their depots. "Bestway operates an Xtra Local and Best-in Club, which gives retailers who join exclusive deals with bigger discounts.
"Some of the margins available to independent customers are really very good," he adds. "They can find a supply of more than 500 of the Best-in own-label products at margins of up to 40% on a number of items and, in the current financial climate, the consumer likes the choice of being able to see what value they can get from buying an own-label value-guaranteed product.
"We would always recommend that there should be a big brand stocked alongside the own-label alternative."
Retailers can also take advantage of high margins through promotions. "Bestway and Batleys run promotions over a three-week cycle, says Gilroy. "These are across all product lines and can deliver very good margins with all popular products that any forecourt trader would need, especially in soft drinks and confectionery. In addition there are regular seven-day special promotions at selected depots"
A cash and carry supply doesn’t mean you’re completely left to your own devices - help and advice is available if you want it. Bestway’s Gilroy says: "Advice from the local depot manager can be invaluable for knowing when offers are coming up. Retailers can also get all the necessary information on new products and keep on top of running their business. With all promotions, for instance, Bestway provides a full point-of-sale pack, which will give the retailer posters, leaflets and shelf talkers to use in their store."
Bestway also holds two seminars a year held in the north and south of England and encourages retailers to attend, to learn what is happening in their marketplace and to discover what products are coming onto the market and how to take advantage of them from the biggest suppliers.
On the flipside, Gulf Retail, which has been operating the Gulf Shop Consultancy Programme designed to build forecourts’ shop business, believes that sourcing a cash and carry or delivered wholesale supply is just a stepping stone to taking on a full shop fascia.
Tony Bailey, Gulf’s in-store consultant, says: "The cash and carry is probably the right option for a small shop not yet ready to take the next step, and people like Booker and Palmer & Harvey offer a good door-to-door service. We would never encourage a retailer utilising the Gulf shop programme to use a cash and carry for top-ups. In much the same way that a fuel company would not expect a contracted dealer to buy fuels elsewhere, it is unacceptable for a retailer who is reaping the benefits of the brand and the package of services on offer to look beyond for a quick saving or because they have ordered incorrectly."
Adam Walsh, marketing manager at Gulf Retail, agrees: "The best way of building a shop business is to work with a recognised independent retail brand. On average, Gulf retailers increase sales by 20% just by making the change, so there is little incentive to use a cash and carry. While a cash and carry may have a greater number of discounted lines on offer at any one time, this does not outweigh the benefits of increased sales, and an accepted brand."
Whether visits to a cash and carry are right for your business is up to you, but as the recession rolls on, there’s no harm in shopping around for the best deals.
=== CHOOSING THE RIGHT SUPPLIER ===
Bestway controller David Gilroy recommends that forecourt retailers ask themselves the following questions when choosing a cash and carry supplier:
l Is the location of the depot right for you?
l Are the opening times convenient?
l Does the depot offer the range of product categories you need?
l Can you get all you need from the one place?
l Are the prices good?
l Is the service what you want and when you want it?
l Can you get product delivered easily and when you need it?
l Can you get good promotional offers?
=== pound potential ===
Forget the BOGOF and WIGIG, the trendy promotional mechanic for now is the £1 price level, and forecourts can get in on the act by picking up bargains at their local cash and carry.
Distributor DCS has developed the Poundzone initiative, which offers retailers a range of branded and own-label household and toiletry products that can be sold for £1. Blakemore, Hyperama, Parfett’s and Palmer & Harvey are just some of the wholesalers that have adopted Poundzone.
As well as branded one-offs such as Palmolive Handwash Hygiene Plus 300ml, which usually retails at £1.72, DCS has also developed an own-label called Enliven, which includes a range of toiletries with a permanent rrp of £1.
Confectionery cash and carry Hancocks has also introduced a range of products to retail at £1, including Kinder Bueno three-pack, Liquorice Allsorts carton 300g, and Flying Saucer cone. Jonathan Summerley, senior buyer at Hancocks, says: "Forecourts could really develop strength by offering a wide selection of confectionery, snacks and drinks to retail at £1."