Palmer and Harvey - Channel Management and Thinking About the Future

The demise of Palmer & Harvey the once great Wholesale conglomerate with a loss of 2,500 jobs is not a great Xmas present for those unfortunate employees. The company has collapsed into Administration despite supplying some 90,000 outlets, from corner shops to Tesco. The company made losses of £17.3 million on sales of £4.4 billion in the year to April 2016.

Many companies would die for those Sales figures - £4.4 billion – but of course Sales is not the most important figure – margin is.

It is not difficult to see what has happened over the years to the sales channels that P&H operate in:-

  • The dramatic reduction in ‘mom and pop’ independent retailers
  • The rise of outlets like Tesco Express
  • Immense changes in the tobacco market – a big element of P&H sales and profits

The first two points are key to what’s happened. P&H would certainly not have felt as much pressure on prices from the Independent Retailers they served when compared to the might of the Tesco buying team. While Tesco may have supplemented (even added to) the VOLUME they will likely have dramatically reduced the MARGIN putting the business under pressure.

Surely P&H knew this would happen had they factored this in to their business plans? Surely they had pictured and evaluated the possible effect of a big player with big volumes but also with great buying power and negotiating skills on their business model? Did they become over reliant on Tesco and have too many ‘eggs in a (non-profitable) basket’? Did P&H explore other potential product ranges and potential channels to the consumer? Had they developed and improved the negotiating skills of their Sales team to (at least) match that of a player like Tesco?

All markets and sales channels will change – that is a fact – businesses need to stay apace with and ahead of the changes to avoid difficulties. We see so many businesses planning for tomorrow by using statistics that happened yesterday and WILL NEVER HAPPEN AGAIN. Business leaders need to be visionary and picture the future and the shape of their customer base TO BE and how to deal with that situation and plan for the pressures.

Our Step Change Growth Programme and Workshop covers all of this. If you would like to talk about your market and get some input on what we feel might be needed for you to thrive and grow profitability get in touch for a conversation or to find out when and where our next free Workshop takes place.

If you want to hear more, get in touch with me at: or call me on 0774 7023610.

David Turner

Managing Director

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