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threat to the Claremorris husiness. with the

ALL CARRY
company recently tightening up its terms and
conditions to reign in its credit terms.
"Any new customers are oish from now on, 1
think actuaJly customers are happier with that
becaiLse they Und they have no dcht as such
starting out. That suits us and it suits them," she
said.

NO CASH? According to Musgrave MarkeiPlace director,


Michael Stafford, its branches have actually
experienced a 2% increa.se in foorfal! over the
past year. As with with (iilmartins, Stafford said
that with hoth retailers and foodservice
operators focusing on managing cash How, many
customers were now acting on a more short-
term basis, which was conducive to the walk-in
CROSS BORDER SHOPPING. U C K OF CASH FLOW. GREY MARKET side of the business.
PURCHASING - THESE ARE JUST SOME OF THE MAJOR ISSUES
(AND OPPORTUNITIES) FACING CASH AND CARRY OPERATORS
TODAY SO JUST HOW BAD IS THE BUSINESS CLIMATE FOR THE
CASH AND CARRY TRADE? ORLA MURPHY REPORTS.

" T ' T T ' T i t h the advent of central distribution At Giltnartins in Claremorris, Co Mayo. 40% However, managing director ot BW<J s
\ 1Í / and the overall decline in tiie walk-in of husine.s.s is still attributed to waik-in trade. wholesale division, John Moane, argues that
T V trade, the concept ot the cash and and this h;)s picked up recently, accortling to increased walk-in trade doesn't neccssarÜy equate-
carr)' has changed hugely in recent years. manager Mar)' Brennan. to hard cash for the operator.
Consolidation has been the buzz-word in the "We closed down a cash and carry in Castlerea "There was a lot of talk a few years ago about
sector, with significant numbers of closures in and we would bave taiten some of their waik-in dying completely, and that dJdn t
2008 and 2009, and rumours of more to come. customers. I sup|.x)se they want to familiarise materialise. Yes, our proportion of delivered
But with talk in the trade about the rccession- them.selves with where their stock is coming business was increasing steadily but for the last
Kielled resurgence in walk-in business, are we from or what we have in stock. Also, it is tew years but its probably stabilised. I don't
now seeing the rebirth of cash and carry? With important for them to walk-in for the simple think it's right to assume that just because
credit increasingly difficuit to obtain, has tbe fact that we would have more offers {here) if somebody comes in that they necessarily have
return of cash-based trading brought some they walked into tbe cash and carry as opposed the cash. You can have the carry without the
retailers hack to the old way of doing business? to taking the hrochure. In the last two years, cash - cash and credit," said Moane.
And. for the independent cash and carry (walk-in) was a dying trade. Bur in the last six Whiie James Fegan of Fegan's in Dublin 7
operators in particular, ha.s the boom in the grey montbs it has picked up again," said Brennan. agrees tiiat more retailers are ciioosing to browse
market allowed them to become more The trend of bulk buying is gone, according rhe floor themselves in search of special ofïers, he
competitive in the way they source and sell to Brennan, and the lack of cash is responsible believes that this trend is nowhere near its peak.
goods? for its disappearance. This poses the biggest "Its not really going to happen until die new

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brunt ofthe white van invasion.
However, Mar)' Brcnnan of Gümartins in
(Üaremorris feels that the cross border issue
hasn't hit as hard ÍLS ic did last year, with most
ROI-based operators better prepared for 2009
.iftcr a pretty tough 2008.
"1 think wf were hit more last year and that's
because we were tinawarc of the fact that it was
i;oing to happen. I would feel that Tesco would
•i.ive done us more datnagc than cross border
i lading did. Having said that. I feel that it has
levelled out because a lot of people fmd that,
•ven though they are getting valtie for money in
lie discounters, tliey haven't got the qtiality of
product that people ate ti.sed to," she said.
Despite being part ofthe Stonchouse group,
( >\Sul[ivan oí Hallisse)'-s in Kerry believes it's
¡fitting harder ior independent cash and cairies
to compete against the b l ^ c r players like BWG
and Musgrave.
"I don't think we can compete on certain
ihings on price because Mtisgrave, for example,
would hiivc much greater buying p<twcr than tis.
I't'ople can't understatul how they can offer stock
:it a lower price than we can," he said.
While John Moane ol BWC! Wholesale agrees
that greater scale helps cash and carries like
Value Centre to offer better value to customers,
he is respectful ofthe abilities of his competitors.
particularly in the independent sector. "There
year. Thitigs have really oniy become as bad as by its location jusi .iO miles from Enniskillen. are a lot of very strong independents out there
thty are over the last three monihs. I think walk- "With the .sterling differential atid with the that we wouldn't uriderestimatc," he said.
in trade died a death a long time ago, but 1 don't price difFerential. its been the most difficult Despite all this negative sentiment, what is
think thai it'll actually come back to any increase period. Our big problem is our ctistomers are clear is that the cash and carry operators of
as yet. We'll see that next y^r," said F^an. going across to rhe north to purchase and cash Ireland are in this for the long haul. Mostly
With walk-in rrade accounting for about 30% and carries from the north are coming in and family-owned operation.s, the bulk ot Irelands
of Fegan's business, it is still an important part of .selling in the Republic. With us being .so close, ca5h and carries arc over .Î0 years old. and have
his firm's operation. However, others - that is a real difficulty," said Dugdafe. been through recessions before, with the over-
particularly in more rural locations - say that Convoy cash and carr)' situated in Liffbrd, Co riding sentiment in the trade being one of
iheir Riture is firmly in delivered. Donegal is feeling its proximity to the border rolling up the sleeves, getting stuck in and
"90% of our business is delivered now," said even more acutely, according to manager Joe fighting it out.
Rory O'Sullivan of Hallis.seys in Kenmare, Co Morris. But what measures are being taken to combat
Kerry. "We'tl have to gti out aggressively to try "We're five miles from the border and the downttirn? For the most part, getting
and get the business, whereas before people obviously we have had problems with retailers suppliers to reduce prices in order to compete
would have just walked in. Now they're not so going across the border and bringing product in. with the North has been the tlrst port of call.
much walking into us, we have to try and go out We also have the problem that our retailers are "One way of combating people going north is
and get the business and call into them and faced with - consumers going across the border. obviously to otFer cheaper prices to our
show (hem what we have." Asda is sitting on our doorstep in Strabane and customers. Obviously when they shop up north
Richard Lombard ofClonlara Wholesale in Plnniskiiien and its very, very, tough at the they have to pay cash tor it. What weVe started
t '.CI ('lare agrees with this view. "Walk-in is on moment. We can compete with wholesalers from to do is to shave down the price to the rock
ihe way out. It's a waste of time for people to be the North by and large, but it's impossible to bottom but look for the money up front. Its
leaving their shops, going in and buying stun", compete with the multiples - the likes of Asda basically giving them the same level of service
whereas they can just order over the phone and and Sainsbury's. Some of their prices are beyond
that they were getting up north, and giving it to
suddetiiy their order has been delivered to belief," he said.
them in the south," said James Fcgan in Dublin.
(hem." However, the cross border issue isn't just Fegan adds chat Irish suppliers have now started
The future ofthe walk in trade might be one confined to those with the misfortune to be to come around to the realisation that price
of se\'eral issues that cash and carry operators located near the border. The inffux of the 'white reductions are no longer a bonus, but rather that
disagree on, but when it comes to the business vans' from Northern Ireland has become they are a nece.<isity.
performance of the last 12 months, there is a apparent to many wholesalers south ofthe "I would say that in the first six months of the
amsensas. Ask any cash aiid carry operator in b(.>rder, who have to contend with Nl-based cash year they were very slow to reaa and that
the Republic how the past year has been, and the and carries approaching their citstomers in the obviously damaged their bottom line. They've
resigned words Very tough' are what you are Republic with the offer of cheaper goods. certainly come back. The b i ^ e r players - the
most likely to hear. "We've lost some customers to that on certain likes of Unilever and Krafi - have all come with
There is no getting away from the issue of iines, especially products like minerals and substantial discounts or they've re-evaluaied their
cross border shopping, which is held up as the confectionery that are coming over the border in pricing structure and come up with a ticw one to
number one reason tor the diíHcult year white vans - no VAT, no nothing," said George compete with the UK," he .said.
wholesalers have experienced, and indeed the Cooke of Bluebell, Dublin. Much further south Joe Morris in Donegal agrees that suppliers
uncertain future that lies ahead. John Dugdale in Co Kerry, O'Suliivan of Hallisseys cites the have been understanding of the difficult trading
believes hts business in Co Leitrim isn't helped same problem, with his business also bearing the conditions he has been faced with. "90% of my

DECEMBER 20O9 CHECKOUT 19


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suppliers have looked very tavotirably on the so weVe gone off and done our own thing, " he said Richard Lomhard of Clonlara Wholesale in
trading circumstances that we face here. They see said. Co Clare.
that we are being proactive in trying to compete John Dugdale agrees: "We have had to import From Musgrave's perspective. Stafford said
and they want to work with us." some product Irom the UK and Northern that tougher negotiation.s with suppliers bad
Itidecd, while many of the operators that Ireland. The Irish arms ot some ot these resulted in better deals being ohtainetl for
Chakotit spoke to .said that most Irish suppliers companies have been very slow to react and very customers, with pricing structures also being
had taken steps to hring prices down, grey slow to change their pricing policy. It's ditficult reviewed.
sourcing remains a contentious issue, and one to understand how a product that's the exact "In addition, we have locused on growing out
which divides many cash and carry managers. same here as 30 miles up die road can he appeal to new trade sectors, pariicularly the
"We're staying away from the grey market," 25/30% cheaper. I think the Irish distributors SME sector. This deveiopment bas been
said O'Suiiivan of Hallisseys. have got to take it on and reduce some of tbeir supponed by an aggressive marketing campaign.
"We're telling our suppliers that we've been prices. Some ot rhem have, hut some of them which has proved to be very successful, leading
approached to huy a certain prr)diict at a certain haven't and tberes still a ditFcrential," he said. to a 20% increase in new SME customer
price, and they're discounting our deliveries rhat James Fegan believes that Imports from registrations," said Stafford.
way. As much as possible, we're not importing abroad account tor 20% ot his purchasing. Aithough tbere is an undoiihu'dly ditlliuli
any stock in Hallisseys. We'd like to keep it in However, grey market huying isn't altogether year ahead, there is still room for optimism.
(he Republic, but it's getting more and more new to his business. While some of the businesses may emerge from
difficult as b i ^ e r casb and carries are importing, "I would have been quite active on that side this recession quite different to how they first
even (from) ourside the North." of things priot to any of rhis happening. What I began, survival is taken as a given.
Brennan of (¡ilmartins also prefers to stay bave noticed is tbat, wbilc other people may "I'd say for the first six months it will be a
loyal to the Irish suppliers. "At the moment were bave been a bit lazy about doing it, everyone has question of those tbat are borderline cases, it'll
sticking with otir normal suppliers. We would be started liKiking outside the UK and Irisb circle, be sink or s-wim untorttmately for tiiem. I'm
hoping that most of our customers would stay even fiirthcr afield," be said. optimistic tor otir own busincs.s. We're long
with tis so in return we would be hoping it's Indeed, wbile BWG'sJohn Moanc established - we've been around since 1929."
Irish jobs we're saving by staying with Irisb acknowledges that it has been a tough year for said David Murphy, of H Murphy in Co
suppliers," she said. the group's casb and carries, he believes that the Wexford.
However, as wholesalers continue to be strength oí the euro bas worked to BWG's "I wouldn't see things improving, even in
.squeezed hy cross border shopping, for many favour in a number of areas. 2012, in my own mind - certainly not even
there is little choice but to look outside of the "1 think (thf grey marker) is very much a close to where we were. Faking wbere we were
Republic tor cheaper imports. feature of the market this year. Some of tbe out of the quesrion, 2010 and 201 I are going to
Sarah Hgan of Sheehans cash and carry in supplier base have been very quick to react and be very tough years. I see everybody re-
Wexford believes that, while prices have come in tairness have reacted in a very positive way, evaluating and re-engineering their biLsinesses to
down, they jtist can't offer the same value as the and some bave struggled. Tbe combination of different models in order to survive. It is ahout
North. falling demand, a very strong euro, deflation. survival ratber than anything else," said James
"At the moment, we're sticking to our usual and price pressure has opened up that Fegan,
suppliers, but I'd say come January now we'll be opportunity to a greater extent than it had in Although John Dugdale agrees that tbe tuturc
starting to import ourselves because we have to." prior years," said Moanc. looks tough, his sense ot bopc is also based on
Some operators are much more up front Although the picture may appear to be grim, the notion of keeping the bead down, working
about the way in which they have restructured there seems to be iiii underlying resilience hard, and coming through on the other side the
their buying operations to meet the nc-w climate. amongst the trade. After all, many ol these long- stronger tor it.
According to Mark Lutniey of Lumley's in cstahlisbed companies have battled through "It's a matter of just staying with ii - just
Offaiy, some 10-12% of yearly purchases now difficult times before. rolling up your sleeves and going back to bard
come from outside the Republic. "Every year there's something ditFerent. work; keeping overheads to a minimum;
"We've bad to go abroad. In some cases, Various things have happened and we coped hoping that one can ride out this recession and
suppliers aren't being responsive and we've just with them and 1 think we'll cope with this. This that there's some light at the end of the
got tired waiting tor tbem to come back to us is more serious though, but I'd say we'll cope," tunnel."

20 CHECKOUT DECEMBER 2009


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