On the eve of the inaugural Unitas trade show, managing director Darren Goldney (pictured) updated Cash & Carry Management’s managing editor Kirsti Sharratt about the group’s delivery of its objectives.
Cash & Carry Management spoke to Goldney to see exactly what has been achieved in that time and what initiatives are coming up:
How have the past few months been at Unitas?
The speed of change has been fast! To put in place a new team, switch head office location, write new contracts of employment, and start negotiating new growth packages with suppliers in such a short period is incredible. I‘m really pleased with the progress so far.
Are you delivering the efficiency and effectiveness you wanted?
Yes, we are. One of the big benefits of the merger is giving suppliers one point of contact, one trade show, one conference, one invoice. We have delivered all of those things very quickly.
Our trade show (at the Exhibition Centre, Liverpool, on 5-6 March) is a good example of how we are trying to make what is a disparate industry more efficient by nailing a lot of work in one go: last year at the Today’s trade show, there were 2.3 million cases traded; this year we are hoping that figure will exceed 3 million.
The whole event is bigger and there are distinct foodservice and on-trade sections to reflect the specialist functions within our diverse group. We are expecting 100 of our member businesses to attend (compared to 70 at the Today’s show) and over the course of the show and awards dinner we will have more than 850 people participating versus 650 last year.
We anticipate that our annual conference, which takes place in Vilamoura, Portugal, on 16-20 September, will offer enhanced value as well.
What other changes are you making that will benefit your members and suppliers?
The membership structures for Today’s and Landmark were slightly different. We are just about to enter our first fiscal year (in April) and we have new membership criteria, agreed by our board, with a ‘more for more’ element. We are beginning that journey: not only are we saying to suppliers that we would like more, and they are saying they will give us more if we do more, but we are also trying to live that ethos through our membership. We want to create a group that is always improving itself rather than resting on its laurels.
For example, we have already expanded our ‘Plan for Profit’ core range scheme to more members and we are executing point-of-sale materials quarterly through a third party. The core range we are recommending is now all the way through the line, either with a logo on a wholesale PLOF or with a shelf-edge ticket in depot.
In April, our promotional compliance tool (Cash & Carry Management: December 2018) will be rolled out through our 50 ‘Plus’ members – those who have opted in to our higher level of membership and who participate in all our promotions.
Every depot of these wholesalers (around 80 throughout the UK) will have an optimisation champion who will be required to photograph promotional activity in their depots and send it through our ‘picture portal’ to provide evidence of compliance. Spot checks will also be carried out in some of our symbol and retail club stores. Members who demonstrate ‘week one execution’ will receive a higher level of reward than those who don’t.
From May, our national promotions will be consistent across the membership.
How have suppliers responded to your request for increased investment?
Supplier companies are full of clever people who are very tough about ensuring return on investment and they naturally want to have elements of conditionality. Although some have exhibited a short-term approach, many are very positive about what we are trying to achieve. They are cautious about any incremental agreements – they want to invest but with some assurances of activity that will drive extra benefit.
We already have a host of new supplier growth packages, a lot of which challenge us, however they are ‘more for more’ agreements. Our objective is to help them sell more and make more margin from what they do sell.
We have developed a way of assessing how well we are working with suppliers – a collaboration scorecard – which involves measuring on a monthly basis four key factors:
• A strong, competitive, commercial deal.
• Service. We have developed a benchmark service tracker where we show suppliers their inbound service level benchmarked against their peers.
• Financial standards. We want to pay suppliers on time and get paid on time.
• Account management standards. We want our fair share of NPD, etc.
Each of the four measures will be graded red, amber or green, with an overall assessment as well. There will also be a section for wholesale members to state if the supplier’s performance differs locally.
The plan is to launch the scorecard scheme in April, and we want it to be an incentive to discuss what the supplier and/or we at Unitas can do to improve our trading relationship. We would expect the grades be challenged if there was a reason – for example, a supplier might be given red for service because our forecast is 1,000% higher than the amount we actually bought.
The collaboration scorecard will also give suppliers’ account managers a useful tool to take back to their own business. We are an £8.5 billion group and we want to put ourselves on the radar of suppliers’ finance, supply chain and marketing departments, as well as their trading departments.
You mentioned NPD – what is your message to suppliers about allocation?
We don’t want more than anybody else, just our fair share. In total, 99.4% of sales through our members are of branded products, so it is really frustrating when we don’t get branded NPD first. I would question the long-term decision-making of a supplier that gives NPD to Tesco and Booker first as they clearly have a much more advanced own-brand range and will probably replicate and therefore dilute any branded NPD. We are more of a certain bet: when we win, brands win.
We are the home of brands but we still think own-label can grow. Ironically the way we think it can grow is by rationalising rather than enlarging our portfolio. We have said that all the Landmark brands that previously existed – including No.3, LSV, Prince Consort and Vintners Collection – will continue under Unitas. However, we are estimating that we will have 15% fewer own-brand SKUs by the end of 2019 than we started with.
Are you intending to change your retail fascia schemes?
No, we will retain both the Day-Today and Lifestyle retail fascias. A lot of our members have invested a huge amount of capital in those fascias, and members that are close together geographically do want a point of difference. What we are working towards is achieving higher standards across our retail estate through, for example, our ‘picture portal’ demonstrating promotional compliance in store.
Apart from Fairway, have any members either left or joined Unitas this year?
Fairway head office left, but individual members stayed, so nothing materially changed. We have an open door to new members. However, quality is more important than quantity – they have to enhance the value of the group, which is why our membership standards are now more exacting.
Is Sam Wilcox (managing director of Blakemore) stepping down as Unitas chairman?
Yes. At the end of our next fiscal year (end of March 2020) we will have a new chairman. Sam will be chairman until then.
What do you see as your main task in your role as managing director?
My job, and the job of the centre, is to recognise supplier needs and wholesaler member needs and then find the ground that brings these two parties together. It is inevitable that we will have to challenge suppliers but I want them to know we will equally challenge our members and ourselves.
In the past there have been too many similar groups and therefore the natural tendency of the leadership teams has been to be less sympathetic to what suppliers want and more sympathetic to what wholesalers want.
I’m hoping that suppliers, despite the short-term challenges, will see that we are beginning to do more of the things they want us to do and will come with us on the journey. We are offering them more business in return for more investment.
Tel: Unitas Wholesale (01302) 249909