Skip to main content

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.
Labels:

Comments

Post a Comment

Popular posts from this blog

Think before you delist your slowest seller

Retailers need to introduce new products to provide their shoppers with "good news" and to generate interest. But for each new product that you introduce you need to consider delisting an existing line. Easy, you might think. I will just print out the list of products in the category and take off the one with the lowest sales. However, if you do this research from the US suggest you might be wrong. What you need to consider is what sort of demand you have for each product, a white paper by Demand Tec, a US specialist software provider shows. It says that there are two kinds of sales: incremental sales, when products add to the total shopper spend and are not readily substituted by another item transferable sales, where shoppers find an alternative easily when it is not available. Using its software, it shows a category with 50 products from top seller to bottom seller. At the same time it also measures the incremental sales each product provides. The number 50 in ove...
1 comment
Read more

Busy street, empty shop, missed profits

True in part to my New Year resolution, I held a business meeting in an independent coffee shop today just next door to a Starbucks. The cafe was presented well and four staff were busy preparing for the lunchtime rush, at 11am. As my guests were late, I had a half hour overview of footfall on the street outside and in the restaurant. Six customers. Barely enough to form the queue in Starbucks or Pret-a-Manger just down the road. Plus one Italian girl who dropped off her CV. Some people stopped to look at the posters in the window and moved on. The owners seemed quite happy. When I left just after 1215, they were doing brisk trade. However, I have the impression that the business is not working hard enough. It could easily have managed 120 customers between 11 and 12, instead of 12. This is lost profit as the fixed overheads and staff costs are already in place. The owners are clearly busy - perhaps too busy to take time to look at the potential that their cafe has. What shou...
2 comments
Read more

Sticks and stones do hurt

My 17 year-old son returned from a rock festival this week wearing a wristband proudly declaring him 0ver 18. He explained how easy it had been to use someone else's ID to get the identification and said it was ironic that he had not needed to show the over 18 band when buying alcohol. Today, Scottish retailer Abdul Qadar is complaining that public authorities are asking people to lie about their age when making test purchases. What trading standards officers may be forgetting is that the fact that retailers invest in a business premises and trade consistently from it make their job much, much easier. The alternative, a world of markets and itinerant traders, will be far harder to police. Mr Qadar's sense of injustice is fair. Those retailers, like Mr Qadar, who value their investment will seek to trade legally and will not sell alcohol to people under the age of 18. Asking children to lie about their age to local traders is a slander on all retailers.
2 comments
Read more