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Executive Summary

Table of Contents

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EXECUTIVE SUMMARY

Key Note estimates that cash and carry sales were worth £9.5bn in 1999, an increase of 0.8 percent since 1997. Although cash and carry is still easily the largest sector within the UK grocery wholesaling market, accounting for just under 63 percent of the market, the delivered sector is growing more quickly. Many cash and carry operators now operate a delivery service in addition to their core activities, and the boundaries between the two sectors are becoming increasingly blurred.
The industry has seen a large amount of consolidation and rationalisation over the past few years, with the multi-depot operators growing through acquisition of smaller companies. As a result of this, the total number of cash and carry depots has fallen sharply, but average sales per depot have increased.
Booker PLC, which is the largest company in the sector, has gone through a turbulent period, with management problems and depot closures. However, following management changes, the company has recently begun to expand again, acquiring the Trademarket chain of depots from the Alldays convenience stores group.
Among the pressures facing the cash and carry industry is increasing competition from the multiple grocery sector, which is itself facing difficulties and possible price wars in the wake of the entry of Wal-Mart into the UK retail market. The industry is countering this by trying to enter the wholesale market and making moves towards supplying both the convenience retail and the catering sectors.
In addition, the continuing problems of cross-Channel trade and illegal `bootlegging` have affected sales in the cash and carry sector`s core trade areas of alcohol and tobacco; stricter controls on cigarette and tobacco sales, including the price marking of packs, may only serve to increase the difficulties for the trade.
Among the strategies being used to overcome these problems are an increased investment in own-label lines, and a general widening of product ranges, including diversification into new product areas. In addition, investment in centralised distribution systems and information technology (IT) will help towards improving efficiency, and new services to customers, including delivery, are being introduced.
Despite this, it looks as if many of the market factors against which the cash and carry sector has been struggling are set to become exacerbated, at least in the near future, leading to a difficult few years in prospect. Key Note forecasts that the cash and carry sector will grow by around 1 percent per year over the first half of the decade, reaching a turnover of £9.93bn by 2004.

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TABLE OF CONTENTS

Executive Summary

Market Definition

INTRODUCTION

MARKET SECTORS

MARKET POSITION

MARKET TRENDS

Table 1: UK Grocery Wholesaling Marketby Sector by Value ( percent), 1997 and 1999

Table 2: UK Grocery Wholesaling Market by Sectorby Value (£m), 1997 and 1999

Table 3: Growth in Sales of Large Food Stores andSmall Food Stores (index 1995=100), 1994-1998

Table 4: Cash and Carry Customer Profile( percent sales), 1991 and 1998

Table 5: Growth of Delivered Trade within the UK GroceryWholesaling Market by Value (£m and index 1993=100),1993-1999

Industry Background

RECENT HISTORY

INDUSTRY CONCENTRATION

TRADE ASSOCIATIONS

Table 6: Share of Delivered Trade within the UK GroceryWholesaling Market by Value ( percent), 1993-1999

Table 12: Non-Specialist Wholesalers of Food, Beveragesand Tobacco by Turnover (number and percent), 1999

Table 13: Non-Specialist Wholesalers of Food, Beveragesand Tobacco by Turnover (number), 1997 and 1999

Competitor Analysis

THE MARKETPLACE

MARKET LEADERS

BUYING GROUPS

ADVERTISING AND PROMOTION

Table 14: Leading Cash and Carry Groups byNumber of Depots, 1997 and 1999

Table 15: Leading Cash and Carry Groups by Total Cash and Carry Footage (000 square feet), 1999

Table 16: Selected Own-Label and Exclusive Brandsof Leading Cash and Carry Distributors, 2000

Table 17: Selected Leading Cash and Carry Companiesby Turnover and Pre-Tax Profit (£m), 1998/1999

Strengths, Weaknesses, Opportunities and Threats (SWOT)

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

Buying Behaviour

CONSUMER EXPENDITURE ON EATING OUT

Table 18: Expenditure on Eating Out(£ per person aged over 16 per week), 1994-1998

Table 19: Average Consumption of Food and Drink EatenOut (grams or millilitres per person per week),1994 and 1998

Table 20: Average Weekly Expenditure per Household onFood and Non-Alcoholic Drinks by Place of Purchaseby Value (£ and percent), 1999

Table 21: percentage of Adults in Great Britain Who Shopat their Local Convenience Store, 1998

Table 22: Frequency of Grocery Shopping ( percent of adults),1997 and 1999

Table 23: Preferred Day for Grocery Shopping( percent of adults), 1997 and 1999

Table 24: Distance Travelled to Regular GroceryPurchasing Point ( percent of adults), 1997 and 1999

Table 25: Form of Transport Used to Travel to RegularGrocery Purchasing Point ( percent of adults),1997 and 1999

Table 26: Average Weekly Expenditure per Householdon Alcoholic Drink by Place of Purchase (£ and percent), 1999

Table 27: Consumption of Drinks and Confectionery BroughtHome (millilitres per person per week), 1988-1998

Table 28: Expenditure on Drinks and ConfectioneryBrought Home (pence per person per week),1988-1998

Outside Suppliers to the Industry

WASTE MANAGEMENT

INFORMATION TECHNOLOGY SYSTEMS

DISTRIBUTION

Current Issues

CORPORATE ACTIVITY

OWN LABEL DEVELOPMENTS

MULTIPLE RETAILERS AND THE CONVENIENCE SECTOR

NEIGHBOURHOOD BUSINESS PARTNERSHIP

DUTY FRAUD

GLOBALISATION

TOBACCO ADVERTISING

Forecasts

FORECASTS 2000 TO 2004

FUTURE TRENDS

Table 29: Forecast UK Cash and Carry Marketat Current Prices (£m), 2000-2004

Company Profiles

INTRODUCTION

DEFINITIONS

FURTHER INFORMATION

Further Sources

ASSOCIATIONS

PERIODICALS

DIRECTORIES

GENERAL SOURCES

BONNIER INFORMATION SOURCES

GOVERNMENT PUBLICATIONS

OTHER SOURCES

Text © 2000 Key Note

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Last updated by Jacob van Eldik 24th April 2000