Peter Whitfield (pictured), account director – key accounts wholesale at Imperial Tobacco, explains why it is important that the trade focuses on category sustainability.
Almost three-quarters of our business goes through the C&C/wholesale sector, a figure that has been consistent for a number of years as retailers are happy with their supply route.
Independent retailers represent almost 50% of sales in the tobacco category, through 40,000 outlets across the UK. Our wholesale partners are key to servicing the needs of these stores, providing constant availability at competitive prices while helping deliver category expertise to support independents in an ever more competitive environment.
How are you looking to strengthen your partnerships with cash & carry/ delivered wholesalers?
We are looking to generate collaborative relationships through a full understanding of each other’s business needs and objectives and then focus on mutually beneficial targets.
Imperial Tobacco’s structure in the field provides the best possible service to the wholesale channel – with a bespoke team characterised through expertise in identifying available opportunities, agreeing an action plan and then working with operations personnel to implement across the businesses.
All of us want a category that is adding value and helping all of our businesses grow. A focus on price will commoditise the market, reduce consumer choice and ultimately move shoppers to retailers operating on the lowest margin and remove profitability from the category. It is important to identify objectives that will help ensure sustainability.
Are there any cash & carries/delivered wholesalers you wish to highlight as being particularly progressive?
Do cash & carries fall short in any aspects of the selling of tobacco?
The level of category knowledge and retailer interaction varies massively across the UK, with many depots having little expertise in this area and the tobacco room manned by whoever is available rather than consistent staff members. Generally, staff are there to facilitate the shopping experience rather than assist the retailer through category advice to develop sales.
Tobacco remains the largest category by value for most independent retailers, and their customers also need more specific local information on trends and opportunities.
An attraction to all suppliers is a high level of retail discipline, to give reassurance that investment is used to protect and grow the business. A number of operators support a symbol fascia that has started to develop this area but there is still an imbalance between local entrepreneurship and delivering a consistent standard of retail.
Similarly, how can delivered wholesalers improve their sales of tobacco?
Appropriate interaction with the retailer is key to developing the business. This starts from the field-based staff really understanding the customers’ business but includes order placement through to delivery. We need to work together to ensure retailers are up to speed with category innovation and are able to benefit from being early adopters rather than late entrants into a market.
Some of the national retailers are now offering same-day delivery as they appreciate the demand from consumers for immediate response. This trend is replicated in the distributive sector.
The retail landscape is changing. Legislation around standardised packaging will affect consumer behaviour as small packs are no longer available, the price ladder will be reduced and RYO will no longer be a cheaper out-of-pocket spend. Furthermore, costs of staffing will increase with the National Living Wage, so business owners may choose to spend more time in store.
Wholesalers who can react to these changes in the most effective way by providing high service levels are best placed to become the supplier of choice and secure a greater market share.
Tel: Imperial Tobacco(0117) 963 6636