The traders at Birmingham market have long supplied a wide range of fruit and vegetables, from traditional staples to weird and wonderful exotics, as the backbone to food businesses in and around the second city. The Pershore Street site is one of a handful of core wholesale markets that run down the spine of the UK, supporting more than 4,000 businesses in the area and employing more than 1,000 people, with a catchment area of growers, suppliers and buyers within a 100-mile radius.
But this month could mark the start of a new era for tenants and their customers, now that proposals for a £145 million move to a new site are on the table and awaiting confirmation from Birmingham City Council.
This comes just as the tenants’ leases roll over in the summer and traders are considering what the future of the market might hold for them, against a difficult backdrop that has seen the exchange rate increase the price of fresh produce and the recession hit customers hard.
Still, the traders have shown that they are resilient, with a number of new firms having set up in the pavilion within the last 12 months alongside fresh produce names that go back generations.
So what are the proposals for the new market? And what will this move, pencilled in for early 2012, mean for existing tenants and their customers?
The existing market was built back in 1973 but, 36 years later, the tenants are facing increasing maintenance and service costs and the necessary repairs to the roof and groundworks alone are estimated at £5m. At the same time, the condition of the site means that it cannot meet the latest food legislation, which is acting as a barrier to the services that can be provided on the premises.
The proposal to move Birmingham’s wholesale market from its city centre location to a new, larger site just three miles away could be just the lease of life that the traders need, after years of rumours and uncertainty about what might happen next.
The council has put together a series of strategic points for a new market to make sure that it will be created in line with the Big City Plan and support the council’s objectives. These include moving to facilities that exceed environmental and food legislation, that have renewable energy systems for cost-neutral or income-generating services and make the most of best practice in food distribution. On top of this, the new site will be expected to become a destination market with an emphasis on diversity, as well as provide training and nurture new businesses.
The proposed site, The Hub in Aston, was chosen in line with the results of an initial consultation with tenants and their customers. The 35-acre space - a step up from the 21-acre existing site - is all set for development and has the potential for both road and rail links. It has three times as much logistics capacity and more parking than the city centre site, as well as space for further expansion.
The idea is that the new market will be built to be flexible and able to meet the changing challenges of the food sector over the next 40 years, with food safety, the continuity of the cool chain and the best use of IT central to the wholesale site, which will sit alongside a public-facing retail element.
The council is waiting for cabinet approval of the move to detailed design following a meeting last Monday and it expects to be able to award the development contract to its preferred development partner PRUPIM in December, so that work can start on the site by October 2010 for completion by January 2012.
The concept already has outline planning permission and, even though traders will have input into what goes into the buildings, a masterplan has been put together.
Matt Kelly, head of operations for markets at Birmingham City Council, believes that the proposed move will bring new opportunities for the tenants, reduce their costs in the long term and boost trade, while falling in line with the council’s vision for the development of the city. He admits, however, that there is still some way to go in the process.
“The difficulty for us has been that this is a huge process, from the first feasibility study four years ago to the full business case, which is where we are now,” Kelly explains. “The stage we are going through at the moment is the difficult process of putting together all the options, seeing what we can deliver and looking at costs, which is before we can even start the design work.
“The existing market is not going to go much further; it is well past its sell-by date. If you walk around it now, it looks tired, with its leaking roof, old pipework and bad infrastructure. If we were to stay on the site, we would have to find a way of generating additional revenue. The new market, on the other hand, is seen as a European exemplar project and we want to build something that will last another 40 years and meet food legislation now and in the future.”
The council is keen to transfer all the existing tenants and attract peripheral businesses to the new site, to maintain the market atmosphere and ensure the long-term sustainability of the market.
“It is a big deal and a big investment, so we have to make it work as a stand-alone business case,” Kelly tells FPJ. “We have got to bring the traders with us, so we have to make it profitable for them, as well as the council. Traders work with high turnover, but margins are low, so if the rent is too high, these businesses cannot survive. At the moment, the tenants are paying high service charges and the move will reduce these dramatically, which is important at a time when everyone is worrying about money.
“We can build the premises, but we cannot make a market,” he insists. “I want to see the new market become a regional hub for food - a destination - and make it the best it can be, but it will still be a traditional wholesale market and I want to carry the traders’ hearts and minds with us on that.”
Back on the market, the traders have mixed views on the move and many are sceptical that the project will come to fruition in the economic climate.
But without exception, the tenants want the best for the market and are keen to do whatever they can to keep their businesses profitable in the downturn, whether it is by offering competitive prices, focusing on their relationships with existing customers or taking a long-term view of the situation.
John Liszewski, managing director of Total Produce and chairman of the four-strong tenants’ executive committee, admits that the proposed move is a “grey area” for the traders, but insists that a “fresh market and a fresh approach” is needed. However, he maintains, any question marks on that front have not stopped everyday business.
“We are very proactive; we are always looking for new businesses to acquire and that is what we have been doing,” Liszewski tells FPJ. “It is important that we continue to promote the business in what is a shrinking industry.
“Total Produce will definitely be part of any new market in Birmingham. There may be fewer players there, but they will be strong players because natural selection will take place… This is a thriving and developing city, so there will always be the need for a market here.”
These sentiments are shared across the market, but the majority of the traders have their own views on the future of the wholesale scene in Birmingham, the best way to operate in the tough trading conditions and what a move would mean for them. Here, FPJ rounds up the view of the traders ahead of the proposed move.
Phil Howard from Mack Markets Division has seen the market change substantially in the last 25 years, but he says that the latest factor to hit the market is the economic downturn. “Customers have started to watch what they are spending, so we just try to buy the best we can,” he says. “We would like to move to cleaner, more up-to-date premises or at least see the site updated if there is a struggle to find the right location for a move.”
G Haines & Son has three pitches on the market and turns over £6.5 million a year. Martin Haines, who heads up the firm, insists the market should not be about “selling everything for nothing”, especially in the downturn. “There is an element of service involved and the customer must always come first, so you have to be able to bend a little bit,” he tells FPJ. “I think this is one of the best markets in the country and I want it to remain that way.”
Colin Jelfs, a salesman at AH Harris, has seen the offer expand from home-grown produce brought in from the Evesham area to a much broader range of fruit, vegetables and exotics, as well as extras such as bottled water. “At one time, sourcing product from Scotland was new, but now we have to try anything we can turn a penny on,” he says. “Historically, we sold only local produce, but we have had to evolve.”
Pauls Produce is one of the newest additions to the market, having started trading a year ago. The firm proves that enterprise is alive and well, with a turnover of more than £4 million anticipated this year - expected to rise to £6m next year. Owners Paul Foy and Paul Cunnington claim that trade is “fantastic” and that they have not looked back. “Eventually, the market will move and we will move with it,” says Foy. “This is the market for the Midlands and it needs independent companies to make it a real market.”
Mark Tate, managing director of George Perry International, is on the tenants’ executive committee. He maintains that trade has not faltered this year, with turnover up 22 per cent to £7.5 million and a further £5m projected from the firm’s new pitch, GP Salads, which opened in December. The boost comes in part because of an agreement to supply Pak Supermarkets in Birmingham, set up 12 months ago.
Ian Goldsby, manager of Vitacress, is confident that the trade will be able to pull through this tough period. The firm, which turns over £5 million a year, has branches in New Spitalfields, Western International and Cardiff, as well as in Birmingham. “This year, prices have been higher because of the exchange rate and it has not been easy,” says Goldsby, pictured right with salesman Dean Maylon. “The future will be hard work, but it has always been like that.”
Hegashall Ltd co-directors Mick Hegashall, left, and Peter Marshall, centre, are pictured here with salesman Joe Redden. They have continued to invest in their business to ensure that trade is at its optimum level, with the introduction of the Freshmetrics handheld price and stock control system last summer. “It took a bit of getting used to, but it is much easier than paperwork,” says Marshall.
Faisal Riaz from Riaz Tropical Produce is pictured with salesman Abdul Ajid, left. “I don’t see the point of moving,” he says. “I would prefer to stay where we are now.”
Julian Dixon co-owns wholesaler and grower Dixon Brothers with his siblings Patrick, Andrew and Nicholas. He is on the tenants’ executive committee and would like to see the traders more involved in the market. “I would like to see some sort of equity in the market; maybe 30 per cent or so,” he tells FPJ. “This would give the tenants more financial stability, give the market a more professional atmosphere and help the supply chain altogether.”
Danville Howe from Howe’s Export believes in the future of the market. The specialist in Caribbean and African product supplies a wide range of exotics, as well as other authentic lines including dried spices, oils, salted fish and drinks. “Things have got a bit slower and prices have gone up in quick succession, but there is still demand for product and independent retailers still make up most of the customer base, as well as takeaways and other foodservice businesses,” he says.
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