Grocery wholesalers enjoyed solid growth last year, says analyst

Although the total wholesale market experienced a slowdown in growth compared with 2019/20, Lumina highlighted the success of grocery wholesalers within this in its UK Wholesale Market Report 2021/22.

Costco and Morrisons were the two fastest-growing, up 15.8% and 15.6% respectively.

This was set against 3.7% growth in the wholesale market overall and sharp falls in foodservice wholesaling, with Brakes, for example, seeing a decline of 34.3%.

Retailers gave a mixed report on the service received from wholesalers.

They were least satisfied with guaranteed availability of products and category advice, with 40% retailers scoring their wholesaler five out of 10 or less for guaranteed product availability and 27% scored five out of ten or less for category advice.

A little under half (44%) of retailers said that they have not heard of the upcoming HFSS (high in fat, sugar and salt) legislation, rising to 54% for independent retailers.

Half (50%) of retailers expect updates on legislation from their wholesaler.

In contrast, accurate invoicing and billing, product quality, friendliness of drivers and ordering process are the areas where retailers were most satisfied with their wholesaler.

Blonnie Whist, insight director at Lumina Intelligence, said: “The last 18-24 months have been incredibly turbulent for the wholesale industry.

“Despite high sales, traditional wholesalers were faced with significantly increased demand that cause huge pressure on the supply chain.

“In contrast, foodservice wholesalers saw demand fall off a cliff. It is no surprise that guaranteed product availability was one of the issues highlighted by operators and retailers, however, there was arguably little more wholesalers could have done.

“With restrictions easing, we expect to see a further rebalancing between foodservice and retail, which will enable greater normality and more robust demand planning.

“The lack of awareness around HFSS should be a red flag for wholesalers, who should take this opportunity to show support to its customers and generate loyalty by nurturing them through the process with advice.

“Whilst many won’t be affected, there is a duty of care on the industry to ensure everyone is aware of what is coming up.”