French firm advances forward to win market share in pallet battle

Expanded deals with food manufacturers including Kellogg, Nestlé and Heinz have finally helped French market entrant LPR secure a 5% share of the UK pallet hire market after seven years of slugging it out with UK firm Chep.

Under its 'one-way-trip' model, LPR takes responsibility for the delivery, collection and repair of its red pallets, whereas Chep - which still has a virtual monopoly of the UK market - generally operates on a 'one for one exchange' model whereby manufacturers take responsibility for administering their own blue pallet pools.

LPR UK boss Jane Gorick, who has built the UK business from £1M to £11M in the last five years, said: "Some people look at their pallet hire contracts annually, others do it far less frequently, so it's all about seizing those windows of opportunity."

While outsourcing pallet hire was simpler and easier for manufacturers, she claimed, it also ensured that pallets were in a suitable condition for withstanding the rigours of automated warehousing systems operated by retailers such as Asda.

"If you have a damaged pallet, it will get rejected at an automated facility, which means you get fined," she said. "We inspect and sort all the pallets before they are issued to customers, and you can find that 8-10% need repairing."

When LPR first entered the UK in 2001, it was aiming to gain 25% of the market in five years, but now accepts that was overly optimistic. Gorick said: "I'm now pretty confident we can achieve 10% share in the next three years."