In his first interview since being appointed as managing director of Landmark Wholesale, John Mills (pictued) talks to Cash & Carry Management’s managing editor Kirsti Sharratt about serving the group’s members and his fears for wholesaling if Tesco acquires Booker.
Debate, decide and do – that’s John Mills’ approach to business and, oh boy, does he have a lot to do in his new role as managing director of Landmark Wholesale! Not because the group is necessarily lacking in any areas, but because, he says, “this latest round of consolidation in the wholesale trade is a big tsunami”.
Mills is somewhat qualified to comment, having had a long and varied career in the food and drink industry. After graduating with a degree in Business from Sheffield Polytechnic – and following brief stints as a croupier and a taxi driver – he joined Quaker Oats as a territory manager. He spent nine years there, eventually becoming national sales manager.
A move to Matthew Clark led to him heading up various businesses within the fiercely acquisitive company, including Grants of St James’s Wines, Gaymer Cider Co and Strathmore Mineral Water. He was then promoted to managing director of Constellation Wines UK.
He later ran InterContinental Brands, had his own consultancy Quantum Leap Management, and was managing director of tea supplier Keith Spicer. More recently, he was non-exec chairman of Hyperama for three-and-a-half years, which led to his latest role at Landmark.
Cash & Carry Management spoke to Mills about his plans for the group and his views on the wider industry:
When you worked for the various food and drink suppliers, did you deal directly with Landmark and/or its members?
Yes. At Quaker Oats, I dealt with the Landmark head office staff and spent a lot of time with members like Bellevue, Renton’s, Martex and Lowries – that’s how far back I go. Later, when I was MD of Gaymer’s, we supplied Landmark’s and Bestway’s own-label cider. And when I ran Grants of St James’s Wines, I launched the Echo Falls brand through Landmark. So I do have a bit of ‘previous’ with the group!
What insight did you gain as non-exec chairman of Hyperama that you have been able to bring to this job?
An understanding of wholesaling. As a supplier you just do not realise the complexity, the thousands of moving parts – the high number of SKUs, the different depots, the employees, the training and legislative requirements. Then there’s the leakage (theft), the difficulty in
finding, recruiting and retaining good management, the DVSA (Driver and Vehicle Standards Agency) rules for trucks, the changing health and safety landscape, the different approaches of suppliers to terms.
So there are huge challenges, and there might be massive turnover but the margins are unbelievably thin, so attention to detail is essential.
Landmark was always known for its focus on attracting and retaining wholesalers who were already very disciplined – in other words, the quality, not quantity, of its members. Is this still the USP and, if so, how do you balance that with the need to offer big volumes in exchange for the best supplier terms?
Landmark is still about the quality, otherwise we would be just a collection of businesses with different agendas, and although that would give us buying scale, that’s not how suppliers work: they want channel disciplines. For us, it’s about ensuring we have the right offering for the right member – we have export members, foodservice members, cash & carry wholesale members. One size doesn’t fit all; we have a series of fits.
My vision is for Landmark to be stronger, not necessarily bigger. If you go back to 2003 when Bestway broke away, people were saying that it would be the end of Landmark but it wasn’t. If anything, it was the right thing for both Bestway and Landmark because Bestway accounted for about 60% of our business, which was not healthy.
Recently, following trade rumours, people have asked me what would happen if Blakemore Wholesale broke away. Of course, I would be very disappointed but we would survive because Landmark is run on a ‘one man, one vote’ constitutional basis and we have 38 members. Clearly, we need critical mass, but we do have a combined member turnover of £2.8 billion so even if our largest member did leave, we would still have more than £2 billion of buying power.
If Tesco’s acquisition of Booker goes ahead, does that put a different light on the need for buying scale and, as such, is a link with Today’s more likely?
We do need to look at leveraged buying solutions – how we can leverage our purchasing to ensure we have the competitive terms to compete with the monstrosity that the new Tesco business would be. It’s not about us necessarily merging with Today’s or SPAR or anyone else though.
Two other buying groups are already members of Landmark – Country Range Group and Confex. Both are very successful in their own right but they are Landmark members because it works for us and it works for them, and in the long term it probably works for suppliers in as much as there are fewer points of contact and therefore greater efficiencies.
So have those conversations started with Today’s? Or could it even mean going back in with SPAR?
All I’m saying is that I’m open to any and every leveraged buying solution. We are looking at every opportunity there is – with other buying groups and non-buying groups – to find better and more efficient ways of buying and also of distributing products to market. I am assessing it on the basis of where we are strong and where we are not, and where the market opportunities lie. For example, we do not have a wonderful chilled proposition and we are not big in the on-trade, so there is potential for us to grow through associations with others. Similarly, if there are better central distribution solutions, we will look at them. As the new guy in charge, I have the remit to be able to do that.
Do you think there is a sense of panic among wholesalers about the Booker-Tesco situation?
And what is your advice to members on this?
Write a letter or send an email to the Competition and Markets Authority (CMA) to say why you believe Tesco’s acquisition of Booker will be harmful. Unless there is such a public outcry that Tesco shareholders question it, the only people who can stop the deal going ahead are the CMA. That’s why I and six other wholesalers wrote a joint letter (see Cash & Carry Management: October 2017, page 7). We wanted to get some momentum going. The CMA base their decision on the documentary evidence that is produced. It is incumbent on us to point them towards numbers and past scenarios when similar things have happened, because they are looking at ‘theories of harm’.
I don’t know if it will make any difference but we had to try. I am extremely concerned that if the deal goes through it will put the independent retail and foodservice sectors at risk of massively increased consolidation that will, in turn, put dozens of wholesalers and thousands of corner shops out of business.
Did you know before you joined Landmark what you wanted to change?
I have always respected Landmark. I have known its management and most of the team for a long, long time. I know its culture and I love the fact it is ‘the Landmark family’. However, if I was being critical, I would say that in the last few years Landmark hasn’t been as proactive as it should have been. And going further back, it was probably too late coming to the market with retail clubs, to the point where some members developed their own retail club formats. We should now have 3,000 quality outlets like Premier has, and we don’t have anywhere near that number.
What are your plans for the Lifestyle Express fascia programme?
In the last few months we have carried out a full audit of our estate. Today (12 October), we had our Lifestyle Express supplier briefing in Coventry, where we updated suppliers on our plans. Lifestyle Express will be about quality, rather than numbers, and we are going to create a ‘Gold Standard’ for what a Lifestyle Express store should be like.
Looking back over the 12 years since Lifestyle Express was launched, we have converted over 3,000 stores, but some of them have gone out of business, some have been lost to competitors, and some have no intention of following a core range or promotions or category advice, and yet we can’t take the fascia off them because, in most cases, it is funded by the owner.
However, we now know which stores are willing to work to our ‘Gold Standard’, and we are asking suppliers to help us get those right and then we’ll grow from there.
Is there anything else you knew you wanted to change about Landmark?
Yes, the annual conference. It was always a quality product but it hadn’t really developed. You will see a very different Landmark conference next May than in the past 15 years.
Historically, we have gone for five nights; that’s going to reduce to three. It will run from Tuesday to Friday, so not the bank holiday Monday and not the half term, and we will try to make the business sessions more snappy, focused and interactive. We are also doing short-haul, not long-haul – it will be in Alicante next year. So that will reduce the cost. We had 158 attendees this year; I would like 200+ next year, and I want people to go away thinking they got a lot of bang for their buck.
Now you have been at Landmark for a few months, what have you decided as your priorities going forward?
Our national promotions need to be deep and meaningful, so we need to sharpen our focus on the top brands. We will be relaunching our national promotional brochure in January with mega deals on the top impulse lines and the KVIs.
We are also doing a review of our own-brand retail range – we will be looking at product quality, the number of SKUs and whether we have any duplication. I want us to have a tighter but wider own-label range – fewer varieties and pack sizes but more product categories. For example, we don’t do cat food in a pouch at the moment, we don’t have a snacks range, we don’t really have a 500ml water that is working, so there are opportunities. For me, our own-label has to offer three things: excellent quality, great presentation and outstanding value.
In general, trading and marketing are my priorities. Administration, finance and legal are all pretty tight under finance director Andrew Thewlis’s control.
How are you hoping to develop Landmark’s relationships with its members and suppliers?
I want to create a trusting culture of openness, with zero politics. Let’s get round the table and debate, decide and do – so we don’t have the same conversations again and again.
Our members are our employers: they pay our salaries and we are there to serve them and to serve them well. If we remember that, we will be okay and there will be a role for us; if we forget that, then the trouble will start.
When I joined Landmark, my focus was on talking and listening to our members – I have probably visited 40% of them so far. Now my focus is on the business here, getting a handover from trading director John Searle, and in the next five or six months it will be about getting closer to our top 40 suppliers by having top-to-top meetings to agree joint business plans. We don’t need to be in bed with every single supplier – we can have purely transactional relationships – but we do want to work closely with the people who get us and who are prepared to invest in us.
A lot of wholesalers are now promoting core range to their customers. Is that something you will be looking at?
Absolutely. Core range is crucial. A typical corner shop is between 700 sq ft and 1,000 sq ft so it only has room for a certain number of lines. We already give core ranging advice – every January we publish a ‘best industry practice’ planogram for all the categories that you find in a corner shop, and every category is agreed by the top suppliers.
What are your overall targets as MD?
Historically, the focus has been on head office net income generated but it is now more strategic – are we growing in the right way to make us a sustainable proposition and platform for our members for the medium to long term? All of our strategies are designed to ensure that our members can survive competitively. It’s about how we can get the best prices, the best promotions, the best technology, the best retail club format. There is tons to do!
Do you have the staff on your team to deal with that workload, especially as John Searle won’t be replaced as trading director?
Yes. We have some incredibly experienced people here, some great knowledge. Because we are not replacing John – who takes a huge amount of experience with him – we have had a reorganisation of the buying structure. Jim Brown and Jon Burton (senior trading controllers) have dropped most of their personal buying responsibilities and will now report directly to me.
How are you finding the job so far?
It really suits me. People say that working for a buying group is like herding cats – but I don’t think that. I believe it’s about bringing people together, getting discussions going, making decisions and then cracking on. That’s what motivates me and I absolutely love it.
Tel: Landmark Wholesale (01908) 255300