nickshanagher

Independent retailers who shop at cash and carry wholesale depots are often characterised as less disciplined business people than their peers who stick to the delivered wholesale route. However, hard times are resulting in price wars between suppliers in some areas and this provides some opportunities. One London retailer I spoke to this week says he is selling bottles of a leading soft drink for 99p, compared to £1.19 in the multiples. The cheapest buying price he can find from a delivered wholesaler is 89p, which would lose him 6.5p on every bottle sold at a 99p price point, due to sales tax. But a new cash and carry depot next to two others near his shop means he can buy the product at 69p, which makes the price point achieveable and he is shifting volume at a 19.5 per cent mark up. He welcomes the battle between cash and carry companies to win his business but also reflects that if they can afford to sell it to him for 69p, then the big supermarkets are probably buy...

In a bid to encourage banks to lend, Sweden has set a negative interest rate for cash deposits from banks. The banks will have to pay the equivalent of 25p per £100 to keep their money with the central bank. Local retailers in the UK will know what this feels like as the cost of depositing cash has risen sharply. One retailer I spoke to this week said his charges have risen from 15p per £100 to 45p in the past two years; and now he sees other banks advertising rates at £2. All this makes it attractive to have a self-fill cash dispenser in your shop or even to offer cash back at the tills. To most shoppers, cash back at supermarkets feels like a benefit. Few understand that it is saving the supermarket money. Few consumers understand that handling cash and moving cash costs money. If you are geared up to accept debit card payments, you should think about offering cash back at the same time.

Major drinks maker Diageo says it is sticking by its premium brands - such as Johnny Walker whisky - despite City pressure to focus on value alcohol brands. A chart in the FT shows the brands at the top and the bottom are doing OK. Cue the death of the middle articles. It was only six months ago that the City was pressing supermarkets to drop their premium own label brands and suggesting that Waitrose, the up-market grocer, was in trouble. A week ago, both premium own label and Waitrose were back in fashion. For local retailers, the premium brands that matter are those that they can move in sufficient volume to generate a good cash margin. If you hear this noise from the City, ignore it. Visiting your local cash and carry and looking at the shelves to see what is moving and what is not is a better bellwether.