The Strathclyde Report in 1994 confirmed that without drastic action the wholesale sector was facing an inexorable decline. However, while the doom and gloom may still be circling the markets, the wind is definitely changing at the UK’s major sites.
“The industry to a large extent has defied the Strathclyde report in that the retraction that was forecast hasn’t really fulfilled its belief,” says Brian Daykin, chairman of the FPC wholesale division and Nottingham Wholesale Market Tenants’ Association.
Contraction is inevitable in all areas of the industry, for supermarket suppliers and wholesalers alike, he says, but that does not translate to a decline in the industry itself. “You’ve only got to ask the councils that have got markets and they will argue the benefits of being able to say, ‘We have a market providing quality produce’.”
According to Daykin, the biggest movement within the sector has been the shift in focus from retail to catering. He says, while the multiples’ surge in power was neither foreseeable nor preventable, wholesalers still have a substantial share of the market place, which has been strongly aided by the rise in demand for catering services.
Although supermarkets have seen the merit in steadily monopolising the convenience sector, the wholesale industry has been slowly building up a good rapport with caterers, he says. “Something the Strathclyde report didn’t take on board was the enlargement of the service industry which is connected to and supported by the wholesale sector, and the catering division is a niche market which is enjoying great development.”
Graham Wallace, group markets manager at Glasgow City Council, says the convenience sector is starting to experience a gradual resurgence which is benefiting the wholesale trade. However, he suggests the boom in eating out is the area which holds the most potential for the non-retail sector.
Krys Zasada, director of Manchester market, agrees that foodservice is set to grow and this sector will form the basis of his modernisation strategy for the market. “We recognised before Nick Saphir’s report the need to move towards market composition and have spent the last three years moving traders in that direction,” he says. “The trend we are seeing is that the traditional wholesale market is changing and markets have got to broaden their offer and demand, and, linked to that, the individuals have got to co-operate on a much broader level. Before we’ve had an almost landlord and tenants situation with us just letting space to food businesses, but we have realised we have got to understand the supply chain and where the opportunities are etc. Our plan is to re-brand the wholesale market as ‘Fresh Produce into the North West’ so it will become a ‘food park’ offering the full range of commodities.”
Zasada says Manchester is looking to introduce a large scale kitchen facility onto the market which will provide the advantage of shortening the chain between suppliers, as many of the foodservice suppliers are already on the market.
While traders may have been cynical about such changes initially, Zasada says they recognise that simply doing nothing is not a viable option, and have come to support the plans which could be implemented as soon as next year.
Wallace says that as a composite market of sorts already, Glasgow would be ideally suited to look at further consolidation. He says he would be keen to expand the small-scale catering sector present on the market and will be looking to implement the facilities necessary for larger scale food processing.
George Bray, chairman of the London Markets Committee and Western International Tenants Association, agrees that composition may ultimately be a sensible approach for Western International but says the industry will not be able to move forward until the future of New Covent Garden Market, for which composition is under ongoing discussion, is decided.
“The situation with Covent Garden is all up in the air,” he says. “They are going to appeal to the House of Lords but that won’t be for another 18 months so we are all basically gridlocked for the time being. The Corporation of London needs to decide what to do before any further movement can take place.”
Bray says New Covent Garden Market Authority’s newly-appointed chairwoman Baroness Brenda Dean recently told him that disposing of New Covent Garden Market would be within her remit but rather than closing it down completely, the authority is actively looking for new owners and examining all possible options, for a successive tendering situation, or the Corporation of London taking on the responsibility of the market.
“Our focus for Western is on the new horticultural market,” says Bray. “We can’t be involved in a composite market for the time being but we would be interested once the new market has been built if they wish to proceed down that route for environmental reasons, or whatever else.”
Change is imminent at Western International. After several years of planning, the relocation of the market is scheduled for completion within the next two years, according to Bray. “All of the tenants that are relocating have been made offers. They have until August to complete the contracts. Then planning permission should be granted in September and building will start in January.”
The original plans for redevelopment suggested only around two thirds of the current tenants would be relocated to the new site. However, the situation has since been revised, so that all tenants, except for a few ancillary traders have been given the opportunity to move.
Daykin claims that like the fresh produce industry as a whole, the wholesale division is fairly fragmented. While there is common ground and communication between the different markets, they are individuals meriting specific attention, which, conversely to the major multiples, might limit the productivity of rolling out bold initiatives across the board.
“No two markets are the same so traffic or waste management policy, for example, has to be unique to the market, that is why you can’t pigeon-hole them, but they do work together on common issues like pesticides and hygiene and other shared problems,” he claims.
Wallace has also observed a move towards integration and says traders are recognising the need to work together on issues, such as promotion. “Individual markets are doing their own thing but at the same time NABMA (National Association of British Market Authorities) and the FPC are doing more to encourage the sector to promote itself. The FPC is in discussion with the industry on the issue of promotion, and the opportunities are there whether it be under the umbrella of healthy eating or regional sourcing or whatever.”
Wallace says as well as offering open days for the local community, Glasgow Market is now involved in a local ‘Culinary Excellence Programme’, which has been established to accommodate a worrying shortage of young people entering the catering industry. “We are the first part of the chain,” he says. “Students come in to the market and see where chefs source all the products from before going into restaurants for work experience. They are also going abroad to work in restaurants in conjunction with their language studies. It is only a small scale project but it’s growing and the traders fully support it.”
All seem to agree that investing in the youth of today is vital to harness future customers and to that end believe the School Fruit and Vegetable Scheme, and its equivalent in Scotland, is a positive step forward. However, so far it has not benefited the wholesale sector quite as much as anticipated, according to Daykin. “The concept of the scheme was that the wholesale markets would be the providers for its development but in essence a lot of players in the industry have got involved, so some wholesalers have benefited and some perhaps haven’t,” he says. “But the scheme is still in its infancy. You have got to go through a generation to find out how successful it is but if people start eating more fruit and vegetables then everyone gets a share of that cake, whether it is retailers or wholesale markets.”
Given the disparate nature of the sector, taking such issues forward can be difficult unless it stems from a united and enthusiastic body of people, says Daykin. “The initiatives need to come from a number of people. I think there is a definite degree of interest among individual wholesalers and we are moving in the right direction but perhaps not quickly enough. It’s all a question of examining what’s involved and finding a formula that stands up and we can implement at the right time.”
Bray says traders at Western International are fully aware of the need to address industry-wide concerns such as pesticides, traceability and waste management, which now accounts for more than half of their service charges. And they wholeheartedly support the move to invest in improvements, he claims. The market has embarked on a large-scale initiative to introduce fork-lift training and Bray says the relocation will provide an ideal opportunity to start additional projects for improvement.
Wallace says cross-sector communication has been growing but suggests harnessing the potential of industry-wide bodies like the FPC and NABMA could benefit the industry even further. “With NABMA we’ve got a good forum for discussing whatever each market is doing. I think in the future it would be helpful to pull together a bit more.”
He is also keen to establish greater links with international markets to benefit yet further from their experience and success. “Germany has implemented some positive initiatives and we are looking to see if we can adapt those.”
While the consumption of fresh produce may be set to rise in the coming years, Daykin and Bray agree the industry has been slowly moving towards a crisis point in terms of employment, which is not going to improve without drastic action.
The majority of staff members are middle-aged or older, with young recruits few and far between. “Where is the new breed of personnel to replace those retiring or soon to retire?” Daykin asks. “The industry does not work social hours and today’s society is driven by leisure time.
“Traders start work at one or two in the morning, or even earlier on some markets like Spitalfields, but young people today don’t want to do that or work six days a week. It’s a big concern for the immediate future.”
“What’s happening at our market is that people are poaching staff from other firms, on the promise of better wages, instead of having a training system,” Bray claims.
“At the moment because of retraction on wholesale markets there has generally been staff available to fill the gaps but that has slowed down now.
“The trouble is, up until recently there haven’t been the profits available to carry any staff or train people but it is definitely something that will need to be addressed in the next few years.”
Despite an inevitable ongoing degree of shrinkage across the sector, all representatives insist traders on their respective markets remain optimistic. “At Western International people are fairly upbeat and the situation is the best it has been in the last 20 years,” says Bray.
“We have a massive ethnic community and we are full. Everyone says the sector is struggling so people expect that but everyone on the market seems to be doing OK on a one-to-one basis.”
“In the last 10 years we’ve lost a couple of players but those that are left are still surviving,” says Daykin. “Optimism is what drives this industry. There will always be somebody who can get through the problems and the reality will be that those that can adapt will survive.”
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