An investment in the future of the local shop

As you can see from this photograph of PR girl Suzi Price standing in front of the doors, the new fridge freezer (the rooms behind her) at Palmer and Harvey's new Hemel Hempstead distribution depot is very large.

Along with a team of trade journalists, I visited the newly refurbished depot last week after a £6.5 million fit out. Julian Streeter, managing director of operations for P&H, explained that this depot was an investment in capacity for growth. Its two depots serving London and the south east of England were reaching capacity. The Hemel Hempstead location to the north west of London was a great fit with his existing network of 14 sites around the UK. Between them they make 48,000 deliveries a week to everyone from Tesco to the local independent c-store.

What may concern independent operators in the south east is that Mr Streeter, pictured here in front of the ambient storage in the 168,000 sq ft depot, says that growth in the south east is being led by the multiple grocers, who are filling London with c-stores [still only 19 per cent market share, unlike the 92.6 per cent of the total grocery market in the Kantar Worldpanel statistics!].

So while it is great to know that there is 26,000 square feet of frozen and 16,000 square feet of chilled space in the fridge-freezer ready to provide local shops with fresh, chilled and frozen goods to sell, local shopkeepers cannot be complacent. Tesco is only too happy to use P&H's capacity to support its own growth plans.

This is a picture of Richard Heyhoe, marketing director, holding the CO2 injection gun that P&H uses for its "thermo-cages", which means that it can pack chilled and frozen goods into an ambient temperature vehicle. This means P&H can deliver smaller volumes of chilled and frozen products to every shop, maintaining temperature control for up to 36 hours - even if the maximum time in the cage will be 16 hours.

With an 80 per cent increase in its chilled capacity in the south east, this clearly shows how P&H believes the market will grow over the next five years.

It is clear from the visit that P&H have fantastic distribution capabilities. But they don't operate a push model. They wait for retailers to pull stock from them. While this may be an oversimplification, it clearly sets a challenge to the independent channel (including those wholesalers and symbol group operators who use P&H already) to invest in creating the demand.

Digital disruption in the UK wholesale space

“Twenty years ago I was driving boxes to the post office in my Chevy Blazer and dreaming of a forklift,” says Jeff Bezos in his most recent letter to shareholders. A blink later and he points out that the company has grown from 30,000 employees in 2010 to 230,000 now. But his ambition is the same. “We want to be a large company that’s also an invention machine. We want to combine the extraordinary customer-serving capabilities that are enabled by size with the speed of movement, nimbleness and risk-acceptance mentality that is normally associated with entrepreneurial start-ups.” Amazon is great at disruption because of its customers focus and the fact that the internet means it needs none (or very few) people between its warehouses and the shopper. The threat of Prime, its membership service, is the biggest challenge facing the UK retail market and the wholesale market by extension. It is both a direct threat and an indirect threat in that is inspiring countless numbers of othe...

New look: big copy small?

The owners of B&Q are talking up how they have cut the price of a store refit from £2.5m to £1m by using wood-effect vinyl instead of wood and painted MDF backboards for displays. Managers are learning to live with grey shelving instead of a warmer-looking cream. Shoppers notice the produce, not the fixtures, suggests one executive. Up to a point! Most local retailers will extract the maximum possible life from their fixtures, sometimes taking too long to change equipment that has become tired. As in all business, it is getting the balance right. Shops need to be refreshed and with a purpose.

What do shoppers see

I read a good post (http://www.newsagencyblog.com.au/2009/08/28/what-do-newsagents-charge-for-faxing.html) asking what price local shops charge for providing a fax service. The blogger had attached a photograph of his sign with his prices on it. What struck me was the message on the sign. "You drop, we fax," it said. "Pressed for time, drop your documents with us and we'll do it for you at no extra charge." That is a message that will persuade most shoppers that you want to give them good value, even if they stay to do the copying or faxing themselves.

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