Don't dread upheaval in wholesale market

Thursday 27th March 1997 00:00

Rapid changes in the delivered wholesale market for catering goods, described in this week's special feature, highlight the developments that have taken place among catering suppliers in the past year.

These transformations have some serious implications for caterers.

Among the changes that have occurred, the biggest have been the merging of Booker Cash & Carry with Nurdin & Peacock and the decision of Cearns & Brown to split from Countrywide Catering Distributors, a national grouping of independent wholesalers.

These moves are typical of many industries: the biggest companies get bigger while the smaller ones find it increasingly difficult to compete and either merge with the larger ones or specialise in niche markets that the big operators cannot compete in.

For the caterer this leads to a number of worries, the biggest of which is that the reduction in the number of suppliers will lead to less competition and a deterioration in the level of service. But this fear is probably unfounded.

The experience of the retail market is that the competition between a few massive multiple retailers - Sainsbury, Tesco, Asda, Safeway and Somerfield - has increased the overall quality of service to the customer.

Where once those retailers used their clout to beat manufacturers over the head to negotiate ever lower prices, they now tend to use their strength to co-operate with manufacturers to reduce costs and innovate with new products.

And in a new twist, multiple retailers are now beginning to specifically target caterers.

Initially confined to stores in tourist areas, some retailers are now rolling out catering packs into more stores and Tesco is even experimenting with a catering delivery service in west London.

Their interest in the catering market is based on the belief that in the future, consumers will increasingly spend their money on eating out at the expense of buying groceries.

This is a move that should be welcomed by caterers. Not only will it increase choice, it will also force the traditional catering suppliers to continue to look at ways of improving the efficiency of their businesses.

That in the end will mean cheaper prices and better service from all catering suppliers, whether traditional wholesalers and cash and carries or the new breed of multiple retailers.

Gary Crossley

Editor

Caterer & Hotelkeeper


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