Presentation given to FDF's Out of Home Group by Charles Wilson, CEO, Booker.

Charles Wilson began with an overview of the business, the problems he inherited and then moved on to the three part Booker Recovery Plan of Focus, Drive and Broaden.

Charles outlined Booker's customer base which consists of 260,000 caterers, 74,000 independent retailers and 69 000 other small businesses. The main focus of Booker is independent operators. The company's turnover is £3 billion, with £0.5 billion of delivered sales from the cash & carry and £2.5 bn purchased at the branches by the customers.

Eighteen months ago, Booker was in a weakened financial state with £360m of debt and sales were declining at 6%. By focussing the business, debts were reduced to £70m by September 2006. This reduction allows Booker more financial freedom. Costs are now under control, mainly by reducing overheads and improving efficiencies.

Since March 2006, the operation had been focused on driving the business forward and putting right the concerns of its customers. This is being achieved by it's commitment to:

• choice up
• prices down
• better service.

Whilst things were better than they were, Charles Wilson believed that Booker still has a long way to go.

However, improvements have been made on all three fronts. Choice has been improved with the addition of ranges such as Fair Trade, Polish and kegs. Prices have been reduced with the on-going programme of Booker Price Roll Back and although, there is a reduced number of promotions, they are deeper cut and better executed. Service has also been improved with the launch of a multi-temperature delivery solution, the introduction of credit card payments and availability is at a four year high.

As a result, sales were up, on average by 2.5% year on year which includes sales of alcoholic drinks. However, taking alcohol sales out of the equation, food sales were significantly up.

Charles Wilson considered one of his main opportunities to build sales, is to target the independent trader operating with white vans. There were 200,000 white van operators of variable quality and reliability. Nevertheless, they were doing a better delivery job than the bigger delivered wholesale operators, due to the economies of delivery changing over the past 10 years.

The two major impact factors were:-

• distribution centres which added to costs and reduced flexible working
• emissions controls etc which meant that the cost to serve customers who are some distance away had gone up.

This meant that a gap had opened between local operators and the nationally based companies, who wanted fewer, larger drops. However, this was in contrast with what customers wanted. They were reducing their back door space for a greater sales area and wanted more frequent, smaller drops - hence the advantage of white van operators.

Another key target area is farm shops, as they delivered strong growth, offered good catering facilities and had favourable credentials with the public. There are 4,000 of them and the aim is to be their largest supplier within two years. Reflecting this diversity from traditional cash & carry customers, Charles Wilson commented about the range of the Booker customer base, as no one customer accounted for more than 0.5% of the business.

Booker has also recently introduced 300 must-stock 'Green Ticket' items into it's branches. These were not necessarily the fastest selling lines, but the most important to customers. Every branch is tasked with ensuring 100% availability of these products.

Booker's plan to broaden its business focuses on exploiting technology. Its website is being re-launched in Spring 2007. This will offer easier navigation, improved speed and highlights the choice of services available to customers.

Booker also aims to grow its chilled and frozen offering from next March. Charles believes frozen will come back into growth. Any future investments that Booker undertook would be funded out of cash flow.

Charles concluded with his vision for Booker. He wants the company to be brand suppliers' preferred route to market and stressed that he needed their help to meet customer expectations. Charles Wilson looked to suppliers to offer simplicity: simple promotions and the avoidance of product duplication. He also asked suppliers to keep Booker informed of any process changes companies were going through to reduce supply disruptions and ensure Booker was providing the best possible service to customers.

top