Consolidation will bring big savings for Spar suppliers

Spar UK suppliers are set to benefit from substantial savings and sales uplifts thanks to the launch of a major distribution programme: the National Consolidation Scheme.

The project, in partnership with Oakland International in Redditch, Worcestershire, works by consolidating supplier deliveries to a central Oakland depot, rather than Spar's six main UK wholesalers. "Suppliers deliver to us in one single drop, then we send one vehicle to each wholesaler," says Oakland md Dean Attwell. Spar suppliers will be charged by volume, as a proportion of overall pallet price under the scheme, he says. "With 200 cases to a pallet, for example, they would pay one two hundredth of the total pallet price for one case."

The deal could be 80% cheaper for suppliers than delivering directly to wholesalers or paying full pallet price for a part-filled pallet, he says.

"Initially the scheme will start with eight suppliers before being rolled out across an increased customer base," Attwell adds. "Eventually this will deliver additional benefits such as improved shelf-life, fewer opportunities for products to be out of stock due to increased delivery frequency, an increased product range, reduced wastage and an enhanced shopping experience for Spar customers."

Most Spar suppliers are also existing stock-held clients of Oakland, so the company can ensure more frequent deliveries to all of its wholesalers, he says. Consequently, products will reach Spar shops more quickly and this could boost sales of short shelf-life products because they could be displayed for a longer time. "I would expect at least a two-day improvement in delivery times for existing suppliers," says Attwell. "The impact on wastage would be significant." He adds: "We're expecting volume sales to increase by at least 15%."

The programme should encourage more suppliers to sign up with Spar, as it simplifies the delivery structure they will buy into.

The initiative took six months to action, from approval to implementation. "We have a one and a half-year contract with Spar, but we see this as a long-term partnership," says Attwell.

Steve Blackmore, management information and supply chain director for Spar, says: "The scheme is well-supported by all six Spar RDCs [regional distribution centres] and will have additional benefits in the roll-out of the Spar own-label products across the business."

Blackmore says the programme will also slash road miles and carbon emissions.