Wholesaler to merge symbol groups to give local shops Iceland own label

NEWS

Grocery sales up by 5.9%

Take-home grocery sales are up by 5.9% year on year, marking the fastest level of growth since March 2021.

Data from Kantar, for the 12 weeks to 27 November 2022, revealed that although grocery inflation has dipped by 0.1% this month, shoppers will need to spend an extra £60 in December to buy the same items as last year.

As a result, customers are leaving seasonal purchases later to manage budgets ahead of Christmas Day.

Head of retail and consumer insight Fraser McKevitt said: “Sales of mince pies, Christmas puddings and Christmas confectionery are worth 2% more than last year, but this can largely be put down to higher prices.”

Coping strategies to mitigate rising costs have yet again resulted in ownlabel sales growing by 1.7% year on year, with the cheapest lines up by 46.3%.

Getir acquires Gorillas

Getir has acquired rival rapid delivery company Gorillas at a discounted price. The all-stock deal, valued at £1bn, follows months of speculation.

The Financial Times reported the move would include a clause dictating that Gorillas investors must inject a further £82m into Getir. In a statement announcing the news last week, Getir founder Nazim Salur said: “Markets go up and down, but consumers love our service and convenience is here to stay.”

EXCLUSIVE

Bestway unveils plan to merge symbol groups

by Alex Yau

alex.yau@newtrade.co.uk

Bestway has outlined plans to consolidate its symbol groups and focus solely on the Costcutter, Best-one, Bargain Booze and Wine Rack brands.

The wholesaler currently operates one of the largest portfolios of fascias, as it also counts Mace, BB’s, Tippl, Central Convenience, Select Convenience, Kwiksave and Supershop in its lineup.

Bestway managing director Dawood Pervez told RN the company intends to convert retailers from those stores into its more profitable flagship Costcutter, Best-one, Bargain Booze or Wine Rack stores.

There is also potential for those stores to move to the flagship Bargain Booze hybrid concept launched this year, which combines the off-licence brand with a Costcutter or Best-one store.

Pervez revealed that a hybrid using the more premium Wine Rack fascia is also in development, while the BB’s and Tippl trials launched in 2019 are to be scrapped following the closure of the first Tippl shop earlier this year.

Commenting on the plans, he added: “We took a lot of lessons with BB’s and Tippl going into lockdown, and what you’re seeing with Bargain Booze, Wine Rack, Costcutter and Best-one is our response to that. Our ambition is that all our convenience formats will fall under Best-one or Costcutter. We don’t want to introduce more brands.

“The hybrid format is a point of difference, as there’s nothing else like it on the market. We’re pushing boundaries on what a good shop looks like.

“We’re trying to move to a model where it’s either Best-one or Costcutter. In some cases, these will have a Bargain Booze or Wine Rack.

“For example, the Central Convenience brand was absolutely fine, but we don’t think it had the consumer cut-through.

“Central Convenience, Select Convenience and Best-one are effectively on the same platform as they have access to the same range and are serviced on the same lorries.

“We’ve had a look at the figures from some shops and believe it’s better for them to be served under Best-one.”

For the standalone Bargain Booze and Wine Rack stores, Pervez added there would be a preference to add a convenience store onto them.

He said: “An off-licence model will have a lower overall margin mix than a convenience store. There is more growth if you combine it with a good convenience store.”

There was no specific time frame for Bestway’s conversion plans, but Pervez stressed that the wholesaler would convert existing retailers rather than offload stores.

Among the UK estate, there are around 2,000 Best-one, 1,568 Costcutter, 508 Bargain Booze and 19 Wine Rack sites.

Mace and Kwiksave count 860 stores, while Central Convenience has around 100 sites.

Iceland wholesale

Bestway also notably launched a wholesale trial of Iceland products into stores this year, with a Costcutter in Nuneaton being one of the pilot sites. The wholesaler already has a number of Bargain Booze concessions in some of Iceland’s larger-format Food Warehouse branches.

Commenting on whether the Iceland wholesale trial would be expanded into other stores, Pervez told RN: “Nuneaton was a quiet trial and we might be furthering the trial in a couple of other locations.

“The retailer was pleased and the products work really well for him. Iceland is good at frozen food, but there are more questions to be answered about the route to market.

“Iceland doesn’t want to be delivering range to convenience stores and I would say it’s still very early stages. There is plenty of further work to be done to move forward.

“Getting frozen Iceland products into retailers is definitely something of interest, but we need to think about how we do it. There is homework to be done in the background.”

Delivery improvements

To help accommodate an increase in retailer numbers, Pervez told RN Bestway will be moving deliveries to three main distribution centres.

He said: “Bargain Booze, until very recently, was 100% delivered out of a single warehouse in Crewe.

“We are in the middle of integrating all Bargain Booze and Wine Rack deliveries into the Bestway Wholesale network. It won’t be for every store, but the majority will be served out of three key locations in Exeter, Northampton and Stoke by the middle of February.

“Serving Best-one, Bargain Booze and Wine Rack stores will become easier because one lorry will be able to turn up to all these stores.”

An example of Bestway’s hybrid fascia stores