Over the summer, the supermarkets have been commanding the level of national media attention usually given to Westminster’s finest, and the dramas look set to continue.
Before we get into that, there are more senior women in UK grocery retail than before but the big four grocers have never had a female chief exec or CEO, and no other retail sector has fewer women in the boardroom. So more power to Sue Knowles, Marketing & Admin Director at Costco Wholesale UK, who received the Costco Award for being an ‘Inspiring Woman’ at the wholesaler’s annual conference in Seattle last month.
Over recent years we’ve seen the big retailers rushing to open convenience format stores and the growth of Tesco Express and Sainsbury’s Local stores putting the squeeze on local independent stores. Now the big supermarkets are going into the wholesale business to strengthen their hold on the convenience sector. It continues the ongoing saga of the traditional demarcations between grocery and convenience blurring as the major supermarkets look for new sources of profit.
First, last year saw Morrison’s agreeing to wholesaling shelfstable, fresh and frozen products to Amazon. At that point Morrison’s also said they would revive the old Safeway brand in their move into convenience, but were vague about how or when.
The next shockwave was the Tesco-Booker £3.7 billion deal, which hit the headlines in January. The price tag was jaw dropping, but so were the implications of Britain’s biggest supermarket buying our biggest wholesaler.
The deal has still to pass the CMA’s scrutiny and is parked until the autumn at least. The opponents’ argument is that if the deal goes ahead, in one stroke it will bring these businesses’ supply chains together, give Tesco a stranglehold on independent convenience retailers and further cloud the division between retail and catering.
After that Sainsbury’s decided they wanted some wholesale action too. Their plans to buy Nisa for a modest £130m have stalled over fears of the CMA sticking its oar into the deal.
Now Morrisons has revealed its plans to bring back the Safeway name as its own label brand for its wholesale deal with McColl’s convenience shops and newsagents, to supply them with Safeway own-brand products and Morrisons’ fresh food.
Alongside all this is the ongoing saga of the wholesaler Palmer & Harvey, which supplies tobacco and confectionery to Tesco’s forecourts and stores.
P&H has tobacco companies and confectionery suppliers as its major stakeholders, keeping it going despite its ongoing problems. There have recently been changes in the senior leadership of WS Retail (Central Stores), Palmer and Harvey’s convenience store chain. Steve Wilkinson, Managing Director, and Tony Start, Commercial Director leave in October and Andy Davis, former BP Trading Director will replace Steve.
So who could come into the fray next? Well it could possibly be Aldi, who operate some 1,700 stores in America, and are fighting for a share of the U.S. grocery market with a new express delivery service, partnering with San Francisco’s Instacart to deliver groceries in Los Angeles, Atlanta and Dallas. If that works, presumably they could try the same here.
Have a successful month.