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Sales in the UK cash and carry sector increased
from £8.65bn in 1992 to £9.51bn in 1996. The sector competes with
delivered wholesalers and mixed businesses, to serve the smaller and
independent grocery retailers and catering sector in the UK. The strong
performance of the food sector in particular, as well as increased alcohol
sales, have contributed to a rise in sales through the grocery wholesalers in
recent years. However, cash and carry operators' share of this market has
declined to 63.7 percent, as clients have switched to delivered service, which offers
additional facilities including credit.
The cash and carry sector can
be segmented according to types of operation into multiple depot operators,
buying groups and independents. Multiple depot operators account for the
highest proportion of sales, led by the largest companies, Booker PLC, Makro
Self Service Wholesalers Ltd and Batleys PLC. Buying groups, consortiums of
wholesalers and retailers, are taking a rising share of business as they allow
members independence of operation, as well as the strength of group membership.
Both buying groups and multiples are able to offer a range of own-label
products to clients. There is also a small number of independent unaffiliated
depot operators in the industry, in some cases, operating mixed businesses or
specialist product mixes.
As smaller grocery retailers have evolved, a
new pattern of trading focusing on convenience lines, cigarettes and tobacco
has emerged. This client base has stabilised after considerable erosion,
following intense competition from the supermarkets. A new source of sales has
also been steadily building from caterers, which have experienced growing
turnover in recent years.
Cash and carry groups continue to invest in
their own-label products and continue to look for more efficient ways of
operating. A number of groups are turning towards centralised distribution
systems to cut costs and increase control. Investment in computerisation and
systems has also been strong. The product mix is also under continuing review
and these measures will contribute towards steady trading for the sector in the
short to medium term.
Text © 1997 Key Note
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Last updated by Duncan Nottage 11th February 1999