Customers using supermarkets as wholesalers.

CliveOfIndia

Tucosalamanca said:

CliveOfIndia said:

Apparently he owned a takeaway, and the Lidl frozen chips were cheaper than what he could buy them for at the wholesaler.  I found that somewhat hard to believe, but there you go.

Infinitely cheaper than the wholesaler.

In my retail days I could buy individual cases cheaper from Tesco than I could negotiate an HGV load (22 pallets) from the wholesaler, even when bringing brand reps into the discussion and rolling in all discounts.

It's still the same now, as an example...
Coca Cola and Pepsi are currently £7 per case in Tesco (sometimes as low as £6)
Wholesalers are charging more than that ex-vat, which makes Tesco at least 20% cheaper.

Interesting.  Which begs the question, why do (presumably smaller) retailers buy from wholesalers at all?  I thought the whole point of a wholesaler was that it was available to trade-only, and was substantially cheaper than retail (obviously allowing the retailer to make a profit).

I've no idea, but I'm guessing the likes of Tesco either buy direct from the producer, or else buy in such huge quantities that they can negotiate massive discounts?  But either way, why doesn't your local corner-shop owner buy all his stock from Tesco then?  If it's cheaper than the wholesaler, he's a happy bunny.  And presumably Tesco are still making a profit, and can adjust their stock orders to accommodate him if it's a regular thing, so they're happy as well.

I've no idea - just genuinely interested in how it works.

the_lunatic_is_in_my_head

Grumpy_chap said:

the_lunatic_is_in_my_head said:

Supermarkets are massive and their scale makes them cheap, food wholesalers also tend to sell better quality food that obviously has a cost so it's not surprising. 

Quality does not always come into it.
I know the former Publican for our nearby Free House and he buys spirits from the superstore because they are lower cost than purchase through the trade channels to which an individual Publican has access.  Branded spirits are branded spirits regardless of the supply chain.

When my wife had her own little food business, the staples at the food suppliers were a decent price but something like blue roll was stupidly expensive compared to buying on eBay, I got the impression they hope most businesses don't have time to mess about buying from here, there and everywhere, instead buying everything from one or two suppliers.

When she worked at one place they were paying £15 something plus VAT for a particular bottle of booze that was £10 delivered on Amazon.... 

TheSpectator

CliveOfIndia said:

Tucosalamanca said:

CliveOfIndia said:

Apparently he owned a takeaway, and the Lidl frozen chips were cheaper than what he could buy them for at the wholesaler.  I found that somewhat hard to believe, but there you go.

Infinitely cheaper than the wholesaler.

In my retail days I could buy individual cases cheaper from Tesco than I could negotiate an HGV load (22 pallets) from the wholesaler, even when bringing brand reps into the discussion and rolling in all discounts.

It's still the same now, as an example...
Coca Cola and Pepsi are currently £7 per case in Tesco (sometimes as low as £6)
Wholesalers are charging more than that ex-vat, which makes Tesco at least 20% cheaper.

Interesting.  Which begs the question, why do (presumably smaller) retailers buy from wholesalers at all?  I thought the whole point of a wholesaler was that it was available to trade-only, and was substantially cheaper than retail (obviously allowing the retailer to make a profit).

I've no idea, but I'm guessing the likes of Tesco either buy direct from the producer, or else buy in such huge quantities that they can negotiate massive discounts?  But either way, why doesn't your local corner-shop owner buy all his stock from Tesco then?  If it's cheaper than the wholesaler, he's a happy bunny.  And presumably Tesco are still making a profit, and can adjust their stock orders to accommodate him if it's a regular thing, so they're happy as well.

I've no idea - just genuinely interested in how it works.

I'm assuming a trade account might be a reason (payment terms) ? VAT reasons?

SiliconChip

CliveOfIndia said:

Tucosalamanca said:

CliveOfIndia said:

Apparently he owned a takeaway, and the Lidl frozen chips were cheaper than what he could buy them for at the wholesaler.  I found that somewhat hard to believe, but there you go.

Infinitely cheaper than the wholesaler.

In my retail days I could buy individual cases cheaper from Tesco than I could negotiate an HGV load (22 pallets) from the wholesaler, even when bringing brand reps into the discussion and rolling in all discounts.

It's still the same now, as an example...
Coca Cola and Pepsi are currently £7 per case in Tesco (sometimes as low as £6)
Wholesalers are charging more than that ex-vat, which makes Tesco at least 20% cheaper.

Interesting.  Which begs the question, why do (presumably smaller) retailers buy from wholesalers at all?  I thought the whole point of a wholesaler was that it was available to trade-only, and was substantially cheaper than retail (obviously allowing the retailer to make a profit).

I've no idea, but I'm guessing the likes of Tesco either buy direct from the producer, or else buy in such huge quantities that they can negotiate massive discounts?  But either way, why doesn't your local corner-shop owner buy all his stock from Tesco then?  If it's cheaper than the wholesaler, he's a happy bunny.  And presumably Tesco are still making a profit, and can adjust their stock orders to accommodate him if it's a regular thing, so they're happy as well.

I've no idea - just genuinely interested in how it works.

I'd guess it'll be because the wholesaler permits the retailer to buy on credit terms to help their cashflow. They could do the same by buying at Tesco using a credit card, if they have enough available credit, but the wholesaler may offer greater flexibility in their terms.

user1977

SiliconChip said:

CliveOfIndia said:

Tucosalamanca said:

CliveOfIndia said:

Apparently he owned a takeaway, and the Lidl frozen chips were cheaper than what he could buy them for at the wholesaler.  I found that somewhat hard to believe, but there you go.

Infinitely cheaper than the wholesaler.

In my retail days I could buy individual cases cheaper from Tesco than I could negotiate an HGV load (22 pallets) from the wholesaler, even when bringing brand reps into the discussion and rolling in all discounts.

It's still the same now, as an example...
Coca Cola and Pepsi are currently £7 per case in Tesco (sometimes as low as £6)
Wholesalers are charging more than that ex-vat, which makes Tesco at least 20% cheaper.

Interesting.  Which begs the question, why do (presumably smaller) retailers buy from wholesalers at all?  I thought the whole point of a wholesaler was that it was available to trade-only, and was substantially cheaper than retail (obviously allowing the retailer to make a profit).

I've no idea, but I'm guessing the likes of Tesco either buy direct from the producer, or else buy in such huge quantities that they can negotiate massive discounts?  But either way, why doesn't your local corner-shop owner buy all his stock from Tesco then?  If it's cheaper than the wholesaler, he's a happy bunny.  And presumably Tesco are still making a profit, and can adjust their stock orders to accommodate him if it's a regular thing, so they're happy as well.

I've no idea - just genuinely interested in how it works.

I'd guess it'll be because the wholesaler permits the retailer to buy on credit terms to help their cashflow. They could do the same by buying at Tesco using a credit card, if they have enough available credit, but the wholesaler may offer greater flexibility in their terms.

Plus I expect the wholesaler is more likely to have the stock you want, rather than you wasting time schlepping around supermarkets only to find your competitors have already cleared the shelves of half the things you want.

the_lunatic_is_in_my_head

CliveOfIndia said:

Interesting.  Which begs the question, why do (presumably smaller) retailers buy from wholesalers at all?  I thought the whole point of a wholesaler was that it was available to trade-only, and was substantially cheaper than retail (obviously allowing the retailer to make a profit).

I've no idea, but I'm guessing the likes of Tesco either buy direct from the producer, or else buy in such huge quantities that they can negotiate massive discounts?  But either way, why doesn't your local corner-shop owner buy all his stock from Tesco then?  If it's cheaper than the wholesaler, he's a happy bunny.  And presumably Tesco are still making a profit, and can adjust their stock orders to accommodate him if it's a regular thing, so they're happy as well.

I've no idea - just genuinely interested in how it works.

Clearly some do but time is a factor I'd imagine, pay someone £12 a hour to man the shop whilst you spent fuel  driving to and then the time shopping in Tesco for maybe 20% of what your shop stocks compared to a delivery driver coming to the shop from the supplier with everything you stock.

DullGreyGuy

CliveOfIndia said:

Tucosalamanca said:

CliveOfIndia said:

Apparently he owned a takeaway, and the Lidl frozen chips were cheaper than what he could buy them for at the wholesaler.  I found that somewhat hard to believe, but there you go.

Infinitely cheaper than the wholesaler.

In my retail days I could buy individual cases cheaper from Tesco than I could negotiate an HGV load (22 pallets) from the wholesaler, even when bringing brand reps into the discussion and rolling in all discounts.

It's still the same now, as an example...
Coca Cola and Pepsi are currently £7 per case in Tesco (sometimes as low as £6)
Wholesalers are charging more than that ex-vat, which makes Tesco at least 20% cheaper.

Interesting.  Which begs the question, why do (presumably smaller) retailers buy from wholesalers at all?  I thought the whole point of a wholesaler was that it was available to trade-only, and was substantially cheaper than retail (obviously allowing the retailer to make a profit).

I've no idea, but I'm guessing the likes of Tesco either buy direct from the producer, or else buy in such huge quantities that they can negotiate massive discounts?  But either way, why doesn't your local corner-shop owner buy all his stock from Tesco then?  If it's cheaper than the wholesaler, he's a happy bunny.  And presumably Tesco are still making a profit, and can adjust their stock orders to accommodate him if it's a regular thing, so they're happy as well.

I've no idea - just genuinely interested in how it works.

You have to remember that two of the big wholesalers, Booker and Makro, are both owned by Tesco for a start.

Most things are a little cheaper in wholesalers but there are certainly some exceptions. It is however a one stop shop so if you want to buy 100 individual cans of coke (rather than multipack) you can have almost certainty that Booker will have stock for you. Go to Tesco and its likely you are only going to see a dozen of individual cans on the shelf so either you have to wait many times for them to and check if there is more or have to go to multiple stores to meet your need. You can have weekly deliveries and know it'll always be there and be able to buy 6 cases of crisps, 5 cases of coke, 5 cases of Diet Coke etc etc. You can also get free credit terms.

It also depends on how you want to sell stuff... the £7 mentioned before for coke is a multipack so if you break it to sell them individually you have to be comfortable with them sitting on your self saying not to be sold individually or not. A single 1.25ml bottle is £1.60 at Tesco, £1.39 at Booker with an RRP of £2.59 for a corner shop 

Bob2000

born_again said:

Bob2000 said:

the_lunatic_is_in_my_head said:

Hello OP

There's nothing unlawful about this, best bet is to write to the head office of the supermarket, they may impose limits if it's identified as an issue (they don't really want one person to buy all the good deals, they want you to go in for £5 chicken and leave with £50 worth of food). 

Supermarkets are massive and their scale makes them cheap, food wholesalers also tend to sell better quality food that obviously has a cost so it's not surprising. 

I'm sure I remember as a kid being taken shopping in Netto and there being signs up limiting x per customer but it's not something you see nowadays, at least not in our sleepy corner of Wales.  

Thank you for the reply.
It's just a moral  issue then taking everything and sod the next person.

Think back to Covid & it was exactly the same, only just everyone at it...

I know and what a depressing  time it was l literally seen people snatching  bog roll out of each other's hands.

Reminded me of them news reports from overseas when they threw parcels out of trucks and it was survived of the  fittest.

Bob2000

Tucosalamanca said:

Faster turnover of fresh goods means less chance of wastage - the supermarket probably appreciates it.

If it's a regular occurrence, it would be helpful if the business customers spoke to the store manager and gave them some notice but I guess that some people are just inconsiderate....

Yes. Sad world we live in.

Bob2000

DullGreyGuy said:

eskbanker said:

la531983 said:

Bob2000 said:

TheSpectator said:

What law do you think is being broken here?

If they weren't allowed to then do you think the supermarkets would let them?

I dont know what law is being broken. That's why l asked the question.
Thanks.

Even if there was a law stopping shopkeepers using supermarkets, how would you imagine this would be enforced?

"Who are you buying these 20 bottles of Coke for"?
"Oh, they are for me".

Nobody can disprove it.

I'd have thought that the major supermarkets would have the capability within their systems to cap volumes of specific items allowed on an individual transaction - I've certainly seen this on a number of occasions over the last few years during supply shortages.  Such limits obviously aren't foolproof though, but if they felt the need to impose them, I believe they could - clearly there's a difference between items routinely sold as multipacks (such as bottles of Coke) and shelves of whole chickens....

But the OP wasnt talking about a store deciding to cap purchases but a law stating that personal customers can buy as much as they want but business customers can buy a maximum of 2 of any one item in a non-wholesaler (or none at all and they must buy wholesale)

The quoted post was questioning how it would be practically policed... how would the cashier know that the 3 sets of 6 packs of coke are for residential or commercial use?

Bob2000 said:

the_lunatic_is_in_my_head said:

Hello OP

There's nothing unlawful about this, best bet is to write to the head office of the supermarket, they may impose limits if it's identified as an issue (they don't really want one person to buy all the good deals, they want you to go in for £5 chicken and leave with £50 worth of food). 

Supermarkets are massive and their scale makes them cheap, food wholesalers also tend to sell better quality food that obviously has a cost so it's not surprising. 

I'm sure I remember as a kid being taken shopping in Netto and there being signs up limiting x per customer but it's not something you see nowadays, at least not in our sleepy corner of Wales.  

Thank you for the reply.
It's just a moral  issue then taking everything and sod the next person.

I'm not sure it's even a moral issue... if there are only 2 tins left how many can the next customer take? 1 so that there's one left for the next person? Can anyone take the last tin because they'll be depriving anyone else after them of the opportunity? Should the richer person buy the more expensive brand to leave the cheaper ones for the poor? Who's considering the person who has an allergy and these are the only ones they can eat?

When there were wide spread supply issues during covid matters did feel a little different and whilst we normally do a big shop with a car periodically (and will buy 20 bottles of coke) and then do weekly shops using public transport we did stop the big shops, yet ironically used a car more. 


Retailers are free to put whatever restrictions they want in place. Some do limit special offer items to a maximum number per customer irrespective of who the customer is. Sometimes supermarkets are cheaper than wholesalers (though Tesco now owns Booker and Makro so it's a decision) and so some will buy from the lowest price. 

Manufaturers try and stop shops too, the multipack cans of coke having a label saying not to be sold individually but there is no law stopping it. Wholesales also have different products though, like calibrated portions so every chicken breast in a pack is the same size so customers can't complain in the restaurant that their portion was too small etc - though for chopped products calibrated isn't required (and its more expensive)

All valid points. Thank you.