Bestway: SWOT

 

Strengths  
Significant number two player

Bestway/Batley's is the significant number two player in the UK cash & carry wholesale market, with sales now around £2.5bn and a portfolio with 65 depots across mainland Britain.

National coverage of the mainland GB market with multi-platform capability

The Bestway/Batley's portfolio provides national coverage of the key UK conurbations, providing access to all the major densities of independent retailing as well as catering customers, through uniformly large, purpose-built depots. Along with its self-service facilities, Bestway has evolved significant capability in providing delivery, with a growing proportion of transactions made online.

Strength in the retail channel

Bestway has particular strength in the retail channel with a loyal customer base amongst independent retailers, especially in the community of Asian traders.

A focus on value and price leadership

The Bestway offer is built around a focus on value and price leadership, providing authoritative ranges in licensed and impulse ranges supported with well-developed promotional programmes.

Weaknesses  
High level of exposure to sales of tobacco

Bestway/Batley's has a high level of exposure to sales of tobacco (accounting for over 40% of the total), a category facing limited potential for future growth and which offers only limited margins, restricting profitability.

Under-developed offer in catering With its historic focus on retailing above all, Bestway has an under-developed offer and customer base in the catering sector, especially when compared to the cash & carry market leader, Booker.
Under-developed temperature controlled ranges

 With a strong emphasis on ambient products the Bestway/Batley's offer in temperature controlled products, though growing, remains under-developed, especially in categories suited to the modern convenience retail offer, requiring customers to purchase through other operators.

Opportunities

 
Area reach

While represented in all key mainland conurbations, there are numerous tier-two urban areas where Bestway/Batley's has yet to reach, offering clear opportunities for future organic growth through new depot openings or acquisitions.

Extension of the service offer

The extension of the service offer, including delivery, retail clubs, the Best-One symbol group and the Bargain Booze franchise offers a range of means to engage further with customers to help drive sales, build loyalty and build discipline.

Catering and foodservice sector potential

The catering and foodservice sector retains considerable potential for Bestway going forward, both for sales growth and improved margins. Bestway/Batley's is well placed to reach a much wider customer base with a highly competitive value offer for the independent catering sector.

Private label offer

The Bestway private label offer is well developed, but considerable scope for further extension remains, especially in the categories such as chilled and fresh, where the branded offer available to independent traders is limited.

Threats  
Competition from other operators

Bestway/Batley's faces a strong competitive threat from the other operators across food and grocery wholesaling, who are competing for a limited and pressured customer base in retailing above all.  These other operators include multi platform operators such as Tesco subsidiary Booker, as well as cash & carry wholesalers such as Dhamecha.

Multiple retailers in the UK

Bestway also faces a serious indirect threat from all the multiple retailers in the UK food and grocery sector, which continue to expand often at the expense of the independent retailers that make up the backbone of the Bestway customer base.

Losing sales to bootleg suppliers

In particular categories, licensed ones above all, wholesalers face losing sales to bootleg suppliers perpetrating duty fraud to offer goods to the independent trade at lower prices than legitimate channels.

Restrictive government regulation

Licensed categories (both tobacco and alcohol) also face an ongoing threat from increasingly restrictive government regulation, placing limitations on the purchase and marketing of these products, designed to drive down consumption.