To tell you food wholesalers are more expensive than supermarkets?

[ProbablyDogNappersHunX]

Inspired by the 'news' story of a small business owner prevented from buying 100 cucumbers in Lidl
www.mirror.co.uk/news/uk-news/mum-says-shes-been-barred-29281295

All the comments on social media were based around "why doesn't she go to a wholesaler it would be cheaper".

The reality is that wholesalers are often more expensive per kg.

I went to Booker today - they're a wholesaler owned by Tesco - and did a comparison of a few randomly selected products from walking into the chilled section and baking section.

Cucumbers
Booker £1.09 each (max purchase of 14)
Tesco 75p each

Plain flour
Booker own brand brand £1.33 per kg
Tesco own brand 53p per kg

Lemon juice
Booker own brand £3.16 per litre
Tesco own brand £2.40 per litre

Carnation condensed milk
Booker £5.49 per kg
Tesco £4.66 per kg
Tesco own brand £2.52 per kg

Silver spoon icing sugar
Booker £2.16 per kg
Tesco £2.30 per kg
Asda own brand £1.80 per kg

There's also less choice (some products I need in my business are totally absent at Booker) and no special offers.

Small business owners simply don't have access to cheap food via wholesalers - they're more expensive! There's a really, really good reason why business owners are buying stock in supermarkets - so they can make sure they keep their prices down for you as an end consumer.

And yes, the whole situation is bizarre.

We sell fruit and veg and yeah supermarkets frequently sell it for cheaper than we can buy it.

Not for everything though

And we've tried buying stuff from Lidl but the shelf life was crap every time we've tried doing that, and the quality isn't as good as we're buying generally

I can’t say I particularly care what the price is at particular wholesalers but it’s fucking annoying to be shopping in a supermarket and someone from a cafe comes and buys 100 loads of bread, 30 tubs of butter, 50 tomatoes etc and leaves non for everyone else.

Also you can’t just compare specific items as supermarkets will regularly have items that they lose money on as a marketing tactic to get people in the store and buying other things.
Like when they sell 15p veg at Christmas and you buy a £200 trolley of party food and chocolate biscuits.

Yeah but her only choice for bulk buying veg isn't Lidl or Bookers. there are loads of wholsesale options for fruit and veg.

I susepct it is more her "business" is not profitable enough for many wholsesalers to bother giving her an account or she has not established it properly. Also people don't just use wholsesalers because they are cheaper - it is also about supply chain certainty, delivery, payment terms, sourcing of different or unusual goods etc..

I’ve certainly noticed more and more small businesses using lidl and aldi, who can blame them?

and yes it is annoying when they clear the shelves.

The fruit and veg in Costco is more expensive than in a supermarket.

Other things are cheaper, I bought two 1kg tubs of Flora for £3.99. Little moons are cheaper as are many other products.
It pays to shop around.

If the wholesalers are owned by the supermarkets surely this is price fixing as Tesco etc are making it impossible for small supermarkets to compete with big supermarket prices? I'm amazed this doesn't break any monopoly laws.

But what sort of decent food business goes to Costco or Booker for fresh veg - especially a juicing business - there are loads of specialist fruit and veg wholsalers out there.

If they're not for end-consumers or for small businesses, what is the point of Costco and Booker then? I thought they were suppliers to smaller shops and that their bulk purchasing power lent itself to economies of scale? If that's not the case what is the point of them existing? Who is their customer base?

We use a specialist fruit and veg supplier. They aren't cheap.

We could buy cheaper but for reasonable quality we'd mostly always be paying advice supermarket prices. This doesn't apply to apples, potatoes, carrots, essentials and basics, but stuff like avocado, mango, any tropical fruit, we'll pay double supermarket retail price

Costco isn’t really for small businesses, it’s just a membership club. It makes its money on membership fees. Makro and booker are though

Costco is primarily retail, just in bulk quantities.

Bookers and bestway are at a crossover point for retail and wholesale and favoured by shit independents

Well yes they are but theya ren't partiairly specialised, If my business was particaurly fruit and veg focussed - such as a juicing business - I would look at something more specialised than Booker or Cost co. There are loads of fruit an veg wholsesale companies out there.

However it could be that 100 cucumbrs Lidl lady is not aware of that.

ugg - mobile phone typos.

I'm sure 20 ish years ago when I had access to a Booker's card, pricing was on a sliding scale based on monthly spend or something? So you'd get a better discount if you had the buying power in the first place to buy huge quantities. This was before the Tesco takeover though so may have changed.

It was always pricey compared to supermarkets. Felt like the only things I got in there for a good price were large jars of spices, and huge bags of chocolate brazil nuts

You'd think so, but apparently not.

Tesco own Booker, who in turn own Premier and Londis. Premier and Londis are run as semi independent businesses, but in exchange for the branding they're tied into a minimum spend with Booker each week.

Tesco have zero interest in allowing Premier or Londis to be similarly priced to Tesco.

But what sort of decent food business goes to Costco or Booker for fresh veg - especially a juicing business - there are loads of specialist fruit and veg wholsalers out there.

For the most part, it's the same stuff from the same fields. It's also common with processed foods - white label is completely normal practice. If you see products with identical ingredients lists they've almost certainly come from the same factory.

I susepct it is more her "business" is not profitable enough for many wholsesalers to bother giving her an account or she has not established it properly. Also people don't just use wholsesalers because they are cheaper - it is also about supply chain certainty, delivery, payment terms, sourcing of different or unusual goods etc..

Less about profit and more about turnover, but at her scale it's very possible to fall into a trap where you're too big for the supermarkets and too small for delivery wholesalers. This is especially the case if you're using lots of a small range of items - you're buying most of Lidl's stock of cucumbers, but not meeting the £££ minimum order quantities for wholesalers. Sometimes it is necessary to go to specialist wholesalers for specialist products - but in general they have less choice than the supermarkets. Until recently you couldn't even buy proper double cream at Booker - just Elmlea!

Also you can’t just compare specific items as supermarkets will regularly have items that they lose money on as a marketing tactic to get people in the store and buying other things.

None of the items I sampled were on special offer today at Tesco or Booker

All that is true but Booker does not equal wholsesalers. Booker is pretty basic and mass market. There are loads of choices of different wholsesale food supply options.

Tesco own Booker, who in turn own Premier and Londis. Premier and Londis are run as semi independent businesses, but in exchange for the branding they're tied into a minimum spend with Booker each week.

Tesco have zero interest in allowing Premier or Londis to be similarly priced to Tesco.
This is awful and has similar undertones to large pub companion buying up pubs, then tying the landlords in with sky high rents and forcing them to buy the pub's beer from the pub company.

The top company makes a lot of money based on having smaller businesses underneath who can never make large profits.

There are other wholesalers out there. For example Bako Western are one of the more popular wholesalers for those in baking businesses

But - while they're cheaper than Booker they're still more expensive than Tesco on many lines - like plain flour.

The real kicker though for a small business is the £300 minimum order quantity. Even if cash flow and shelf life isn't an issue, storage definitely will be! Finding somewhere to store so much stock can be genuinely impossible if you're working out of a small kitchen.