Slimming down: Strong competition and wholesale bypass has led to revenue falling

Over the five years through 2017-18 the industry has had to contend with slow growth in real disposable income and volatile consumer confidence. Since 2014, the industry has been affected by the supermarket price war, which has suppressed selling prices across the industry. It has also had to adapt to the rising incidence of wholesale bypass, which has damaged revenue as large supermarkets circumvented wholesalers by establishing direct relationships with manufacturers.However, steady demand for the staple and inexpensive products offered by the industry has prevented revenue from contracting significantly over the past five-year period. The strong performance of other downstream industries also supported grocery wholesalers...read more.

Industry Statistics & Market Size
Revenue
$40bn
Annual Growth 13-18
-1.6%
Forecast Growth 18-23
Profit
Employment
88,282
Businesses
3,480
Market Share of Companies

Industry Threats & Opportunities

  • Competitive pressures and rising purchase costs have led to further revenue decline
  • Consumers have become increasingly attentive to health and convenience
  • The loss of CAP funding could pose significant problems for upstream farmers, pushing up costs
  • Industry Report - Industry Key Buyers Chapter

    IBISWorld estimates that the industry's level of market share concentration is low. The top four companies in the industry – Booker Group plc, Bestway Group (Holdings) Ltd, Palmer & Harvey and Costco Wholesale UK Ltd – are expected to account for 20.6% of revenue in 2017-18.IBISWorld expects there to be just over 3,500 companies operating in the industry in 2017-18, which is a slight increase from the previous year, despite tough conditions for wholesalers. A degree of merger and acquisition activity has occurred over the past five years. For example, Booker Group acquired Makro Cash & Carry in July 2012 for £143 million.In addition to large wholesalers such as Booker Group and Bestway, there are also many small companies operating in the industry. Typ...purchase to read more.

    Additional Insights for the Grocery Wholesaling Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Grocery Wholesaling Industry are

  • Ability to avoid wholesale bypass
  • Ability to pass on cost increases
  • Ability to alter goods and services produced in favour of market conditions
  • IBISWorld analysts also discuss how external factors such as Demand from supermarkets and Demand from full-service restaurants in the Grocery Wholesaling industry impact industry performance..

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    What's in this report

    What is the Grocery Wholesaling Industry?

    Businesses in the Grocery Wholesaling industry wholesale a range of food products, including prepared meals, bread, dips and condiments, food spreads, savoury snacks, sandwich fillings, tinned goods and processed grain and cereal. The industry excludes the wholesale of fresh or frozen meat and fresh, frozen or processed vegetables. It also excludes the sale of beverages, dairy products, eggs, tobacco and confectionery.

    Industry Products
  • Prepared meals
  • Bread
  • Dips and condiments
  • Food spreads
  • Savoury snacks
  • Processed grains and cereal
  • Sandwich spreads
  • Tinned goods
  • Industry Activities
  • prepared meals
  • bread
  • dips and condiments
  • tinned goods (excluding tinned fruit and vegetables, and unprocessed meat)
  • savoury snacks
  • sandwich spreads and fillings
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Demand from supermarkets
  • Demand from full-service restaurants
  • Real household disposable income
  • Demand from food-service contractors
  • Health consciousness

  • Current Performance
  • Supermarket

    price war

  • Shortening supply chains
  • A convenient truth
  • Chart: Revenue Growth

  • Industry Outlook
  • Taste for growth
  • Referendum effects
  • Wage changes
  • Table: Grocery Wholesaling Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Grocery Wholesaling Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Supermarkets
  • Fruit & Vegetable Retailers
  • Newsagents & Stationery Stores
  • Full-Service Restaurants
  • Catering Services

  • Key Selling Industries
  • Bread & Bakery Goods Production
  • Pasta Product Manufacturing
  • Seafood Processing

  • Products & Services
  • Prepared meals
  • Tinned goods
  • Bread
  • Processed grains and cereal
  • Dips and condiments
  • Savoury snacks
  • Food spreads
  • Sandwich spreads
  • Chart: Grocery Wholesaling Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Supermarkets and convenience stores
  • Restaurants and takeaways
  • Caterers
  • Specialised food stores
  • Department stores
  • Chart: Major Market Segmentation for the Grocery Wholesaling Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitPurchasesWagesRent, utilities and depreciationOther
  • Chart: Cost Structure Benchmarking – Sector vs Grocery Wholesaling

  • Basis of Competition
    Internal competitionExternal competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Grocery Wholesaling Industry

  • Industry Globalization
    Booker Group plc,
  • Table: Booker Group plc - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Grocery Wholesaling Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Grocery Wholesaling Industry
    Includes:
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Cash On Delivery
  • When a buyer pays the wholesaler upon delivery of goods as opposed to in advance.
  • Cash-And-Carry
  • A type of wholesale operation where consumers go to the wholesaler's store to purchase products.
  • Specialised Wholesaler
  • Wholesalers that specialise in the sale of one type of product, such as fruit and vegetables.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Grocery Wholesaling market research report is a comprehensive guide to market size and growth prospects. Our industry reports offer strategic industry analysis of the factors influencing companies, including new product developments, economic, lifestyle and demographic influences, distribution and supply chain factors and pricing issues. Full analysis accompanies our data forecasts to illustrate how the market responds to emerging industry trends.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Grocery Wholesaling:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Grocery Wholesaling market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Grocery Wholesaling, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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