Key Summary
- Dhamecha’s new card fees spark retailer backlash.
- Protest held at Hayes depot over added charges, more protests planned
- Dhamecha considering to review rates; final decision expected on June 22
A new card handling fee announced by wholesaler Dhamecha Group has ignited fierce backlash and a rare wave of unity among independent retailers, exposing friction in the wholesaler-retailer relationship. In response to mounting protests and online uproar, the wholesaler is now reviewing the proposed rates and will announce them by end of this week.
From July, Dhamecha will begin charging 1.25 per cent on business credit card transactions, 0.7 per cent on Business Mastercard debit cards, and 0.2 per cent on Business Visa Cards (capped at £2.50). No fees will be charged for payments made using personal debit or credit cards, cash, or Mobile App Payment.
The decision, announced in late May as a cost-control measure, has struck a raw nerve among independent retailers already reeling under relentless cost pressures.
The backlash was immediate and visible. On June 13, Dhamecha’s Hayes depot became the epicentre of a rare show of defiance, as dozens of aggrieved retailers staged a protest outside the site.
The video, posted by a protesting retailer on Facebook, captured a unified, vocal, and furious scene almost unseen in the fragmented world of independents. More protests are planned over this weekend at Dhamecha's Croydon branch.
However, it looks like the wholesaler has been taken aback by the show of solidarity, the scale of the protest and social media uproar, including the trending hashtag #boycottDhamechaGroup.
Dhamecha Group has acknowledged the protesting retailers, thanking them for their feedback.
In the communication sent to retailers, seen by Asian Trader, Dhamecha Directors assured that the wholesaler is in the process of "reviewing the proposed rates" and will share the final fee structure by the end of the week.
"As a company we cannot pay our suppliers by corporate cards for stock purchases. Whilst our peers have stopped card payments or raised prices, we believe a clear handling fee for certain payment methods is the fairest option," stated the statement by Dhamecha Directors.
“Punitive and heavy-handed”
Retailer resentment for Dhamecha Group is rooted not only in the charges themselves, but in what they could herald as a domino effect across the wholesale sector through similar “handling fees”.
What Asian Trader heard from independent retailers wasn’t just concern but a growing sense of betrayal.
Retailer Neil Godhania, who owns two convenience stores in Peterborough, shared, “I think it's a bit cheeky in all honesty, because I think the problem that we face now is that if one wholesaler starts a practise like this, the rest will follow soon.
"Probably, Dhamecha Group, being the first, will have to bear the brunt.
“We are independent retailers. The problem we have is our costs are rising right from electricity bill to wages while margins are almost standstill.
“The charges might be small, but they are going to hit us badly. The charges are introduced on business cards and every retailer uses cards only for big transactions. No one pays for stock in cash!”
Though Godhania was not present at the protest site, he empathises with protesting retailers and “can see why they are doing it”.
Godhania cautioned that Dhamecha’s move might backfire, stating, “Lots of retailers are uniting and a lot of them might boycott Dhamecha Group.
“We saw the protest videos on social media and Whatsapp and the anger among the retailers was evident. Clearly, people have not taken this well.”
For retailer Avtar 'Sid' Sidhu, owner of Budgens St John's in Kenilworth, the move by Dhamecha Group feels “highly punitive”.
“After being used to having the benefit and flexibility of paying with the card , the charges seems highly punitive. It is not going to go down well with the retailers.
“The protest at the depot clearly shows the mood and reaction among the retailers. At the end of the day, we retailers will be forced and arm twisted to get used to it," Sid told Asian Trader.
Sid also noted that even though the charges may appear “not very steep,” but they come at a time when retailers are facing mounting pressures, from higher wages to ballooning energy bills, putting an added pressure on independents.
“They are taking away the ease of business and now many will be forced to consider other options,” he said.
Dhamecha App push and incentives
Dhamecha has sought to justify the charges by pointing to the costs of processing card payments. The wholesaler is actively nudging retailers to use Dhamecha Mobile App instead which incurs no fees and rewards customers with special discounts on key lines.
Some retailers, like Imtiyaz Mamode, acknowledge the business rationale. Despite being two to three hours away from the nearest depot, Mamode still visits Dhamecha once in a while only because of its generous margins which is 30 to 33 per cent compared to the 20 to 25 per cent that others offer.
“Dhamecha Group is also encouraging retailers to use its app. Sometimes, businesses have to take harsh decisions when they are implementing something new. I as a businessperson myself completely understand their point of view but since I don’t rely on it totally, its not going to affect me much,” he said.
Godhania and Sid also agree that the wholesaler usually offers the best-in-the-industry offers, that make sourcing from its cash and carry a fruiftul excercise.
The new charges have left Godhania visibly displeased, though not enough at least for now to make any drastic moves. He is though certainly upset.
“I go to Dhamecha cash and carry only because they have some wonderful deals which are always worth buying. The charges, to be honest, will hurt but I won’t be making any massive pivot as of now.
“Every other month, there is either some new charges or some new legislation which is usually not in our favour and puts us in a spot. Now I am not used to take these things as a challenge," Godhania told Asian Trader.
“For me, it's just another bump in the road."
He added that it may even be a strategic move. “If you look more pragmatically here, Dhamecha Group just might have increased their pricing structure instead of this new charges. I think it's a bold move on their part.
“What I am keenly watching is the government stand on the issue of card usage charges and if it is going to put some handle on it.”
Dhamecha Goup is certainly a boon for small convenience stores, some of which rely totally on its depots for their supplies. For such store owners, the sudden move feels like a sharp and unexpected blow.
The wholesaler is now “reviewing the proposed rates,” though it is unlikely to take a complete U-turn. A revised rate structure is expected by Sunday (June 22).
Show of solidarity
For many, the issue has exposed a deeper vulnerability within the independent sector which is a lack of collective bargaining power.
As stated by Kam Sanghera, MD at symbol group Select & Save, for the first time in a long while, genuine unity among independent retailers can be seen.
“Over the past year, I’ve consistently championed the need for retailers to come together, and it’s clear that many of you share that same belief,” he wrote on social media. “I couldn’t be prouder to stand with you all.”
“It’s worth noting that since the demerger of Nisa, the retail sector has remained the only segment of the food industry without its own mutual. That must change.
“A united retail mutual would be unstoppable, one that drives better margins, reduces operational costs, and reclaims our voice in the supply chain,” he stated.
Dhamecha Group’s new handling fee clearly angered the retailers but it also bought to the surface a rare wave of solidarity across the retail sector and an emerging friction between wholesalers and retailers.
All eyes are now fixed on June 22, when Dhamecha is expected to announce its final rate structure, an update that could either calm the storm or deepen the divide.
