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Competition at the frontline – lessons for small business

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East End Foods in Birmingham, UK, is a success story. A business that has grown to £180m turnover on the back of providing the right product at the right quality to the market. They even sell rice processed in Birmingham back to India – a modern day coals to Newcastle. The brand has the strength to make people see it and want it.

The food division processes rice, grains, spices and many other foods. But the wholesale cash and carry division shows their competitive spirit. A £25m investment in the Aston, Birmingham cash and carry warehouse is significant. Why? because it is a key link in the supply chain to the small retailer. They go to East End, stock up on the bulk supplies for their shops and merchandise this to the public. East End even work with retailers to improve their stores.

Going head to head with the retail multiples (Tesco, Asda etc) does not sound like a good strategy – but that is what they have done. They want to get the right product into shops to enable the shops to compete.

Being members of the UK buying consortium Landmark also helps. It enables them to buy from the manufacturers at prices comparable to the ‘mults’.

This business impresses on many levels – but what are the lessons for small businesses?

Cash is king – collect cash promptly and keep it in the business for re-investment

Process and operations – wholesale is low margin, so the operation has to be excellent to protect margin

Quality – if you want a brand to be recognised it needs investment in process and sourcing to get the right ingredients

Eye for detail – an ethos of detail first to remove waste, spot opportunities and realise them

Negotiate – everything is negotiable!

david@graceaccountants.co.uk


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