Morrisons Incursion Good for Wholesale

The news that Morrisons has developed an app to allow its wholesale and franchise partners to top up in its supermarkets (The Grocer 5th July) would appear at first sight to be a small tweak to their wholesale customer service suite. It enables retailers to scan the items they want with their smartphones, get pricing based on their agreed terms rather than store prices, pay for the goods and receive a business invoice. An electronic delivery note is instantly sent to their store EPOS systems via email. ?This is far from a small tweak. It's a smart piece of added value service consistent with the retailer’s aim to target hitherto traditional wholesale customers. Morrisons is serious about wholesale.

There have been rumours that the supermarket is planning a move into cash and carry but this is being played down. As The Grocer reports, the retailer’s wholesale division currently stocks a range of over 9,000 products for delivery and supplies more than 1,600 stores across five countries. Convenience and wholesale are key elements to the company’s strategy and earlier this month Morrisons confirmed it had converted over 1,000 McColl’s stores to the Morrisons Daily format with an aspiration to increase this to 2,000 stores under the fascia next year. Further growth is coming from the growing number of small independent retailers signing up for the “Together with Morrisons” package – a jointly branded partnership model. They appear to be attracting the higher quality independent operators such as Jempson’s.

There is no doubt that Morrisons is becoming a serious competitive threat to the existing wholesalers suppling the small independent stores. Possibly the catering market too. Their stock availability, own label and fresh food ranges – particularly in short life products will be hard to beat. And Morrison’s operational model looks to be simple, efficient and scalable. None of this should come as any surprise. The multiple retailers have been looking for ways to take slices of market share from the wholesale sector for years. It appears to be the soft underbelly of the food and beverages sector. And they will be well supported by suppliers who understandably follow the growth.

What can wholesalers do to combat this incursion? Be brilliant at what they do. Easily said – not easily done. The smaller wholesalers could feel the heat. In an industry not renowned for strength in own label, fresh food, or product availability, the wholesalers will have their work cut out to raise their game. Managing their existing customer relationships will be more critical than ever. This can only be good for the industry overall as another large player servicing the market could help raise standards and with the vendor/purchaser equilibrium.

David Gilroy ? 2024