Independents vs Multiples - Back to the pricing issue!

If you read my piece a few weeks ago, you would have read an article on a prospective new supplier who came to me with ridiculous pricing proposal for a potential range of new products that would have meant that our retail customers could have bought the same products cheaper at Tesco’s and Asda.

Well, I am ranting and raving again this week – and in this case, probably more annoyed, because the supplier in question is an existing supplier and the supermarket in question is Waitrose – of all places. The price points in Waitrose, on the whole, are within 5% of the pricing in most independents, which is fine. It is often the case that wholesalers such as ourselves are the first channel to sell to retailers, so new food products are often first seen in the farm shops and food halls of the UK, rather than the multiples where the lead time for taking on new products is longer. Indeed, sometimes we have been selling a range of products for a year or two and then they may be introduced to Waitrose. If the pricing level is maintained, then this often results in our selling more volume to the independents, as their presence in Waitrose can fulfill a marketing function i.e. ABC1 consumers may see the product in Waitrose, but don’t pick it up because they are working from a list, but may buy the product when they have more time and are shopping at a farm shop at the weekend, for example.

Imagine then how angry I was this week upon finding that a product advised to us with a recommended RRP of £3.89 (more for most of our retail customers) I found in my local Waitrose for £2.75. The whole range was priced in a similar way and was not on promotion. The retail price in Waitrose is less than our trade price to our retail customers! This means that the best advice I could give to our retail customers would be to stop buying the products from us and go down to your local Waitrose and fill up your trolley. I haven’t done this yet, the ball is currently on this suppliers side of the court, but unless this situation is resolved, we will be de-listing the range from our next catalogue and I will be publicizing their details in this blog within the next few weeks. I have really had enough of being “used and abused” by suppliers in the speciality food market, who come to me saying that their focus in on the independents and they would love to work with Cotswold Fayre. When I ask them whether they intend to supply the multiples, they claim not to be interested, but this is their agenda from Day 1. Use a few wholesalers to get their product out there, attract the interest of supermarket buyers, and then in effect “screw” the wholesalers, as they have done their job for them. All the investment the wholesaler spends on building the brand in the independents is wasted unless the independents are able to retail competitively.