Competition - Good Or Bad?

Speciality Bites with

Paul Hargreaves

Chief executive of Cotswold Fayre

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Last weekend I went to Jersey at the invitation of one of our suppliers, La Mare Wine Estate, who make the most fantastic product, Jersey Black Butter, as well as making their own wine and distilling their own brandy! Quite an operation!

Whilst there I took the opportunity of visiting a few customers and a few places that hopefully will be customers. Despite Jersey’s reputation for affluence there was a bit of a feeling of doom and gloom there although it didn’t take long to work out why.

Waitrose is relatively new to the island and farm shops and delis were definitely taking a while to get used to their new competitor. Of course, on the mainland, we have been used to this for a while, and I am sure in a short time these places will come fighting back. But they have had things their own way for a while and are currently in the process of re-adjusting.

I do wonder sometimes whether Cotswold Fayre acts as a sourcing company for Waitrose. We search the company and the globe for new innovative products only to find them in Waitrose around 6 months to a year later. Still, the same thing happens with our closest competitors, some of whom rarely seem to have any good ideas of their own, but simply approach all our new suppliers as soon as we launch a new range. It is said that imitation is the best form of flattery, but I am not sure it is to the benefit of small speciality brands to have their products involved in a price-cutting war, as this is what seems to be happening within the speciality wholesale world.

As we seem to have grown a reputation for being the leader in the pack some of our competitors have resorted to desperate tactics. For me, selling is the ability to encourage a retailer to take new ranges of products and re-merchandise their store. It is not just taking an order for the same products they already have and just reducing the price. Yet, of late, this is exactly what some of our competitors have been doing. However, in these difficult times, being offered silly discounts is too tempting for some.

Whilst in many ways they are powerless to intervene, it is my view that the producers and brand-owners should take a closer look at this, as there is damage being done to some brands which are now being treated as a commodity rather than a brand that needs nurturing, tastings and further activity in order to develop a following. Working on tiny margins makes these things impossible for the wholesaler to organise, so it is really the consumer that is missing out.

It also makes me wonder whether we will see more wholesalers go out of business in the coming months which is generally what happens when companies chase turnover at the cost of margin.

Have a profitable week’s trading!