Wholesalers need urgent support from government, Darren Goldney says

Wholesalers are experiencing “differing and more extreme pressures” during the ongoing coronavirus crisis and the government needs to do more for the sector, Unitas Wholesale managing director Darren Goldney has said.

Goldney said the bounce in retail has been posing challenges around stock, supply and staffing for the members of the wholesale buying group.

“Some are facing complete demand stoppage and temporary shut down, while others are approaching the even more difficult challenge of having a trickle of demand from vulnerable customers such as care homes and hospitals etc but still having a ‘cost base’ that needs ALL the sales in order to be financially viable,” he said in a statement.

Bad debt, resulting from customers cancelling direct debits as businesses are forced to close, and perishable stock are the two other major issues faced by the sector, he added.

While appreciating the “massive investment due to flow into the wholesalers’ customer base,” Goldney said the government should aware of the practical reality.

“Collectively, we must work on ensuring a government-backed scheme to ensure the grant system is used to pay wholesaler credit or the government must support the bad debt,” he said.

Goldney said the proposed interest-free loans may add to the woes of the wholesalers.

“The interest-free loans at the time of writing still appear inaccessible to wholesalers who, for generations, have worked to create an asset value that may preclude these loans and force a situation where they can borrow but at commercial rate and with no guarantee of debts to them being paid in the future.”

He demanded the government to guarantee the loans disbursed to small businesses so that the burden would not fall on wholesalers and suppliers.

“If government underwrites the debts, suppliers can therefore extend credit in confidence, knowing they can see the route to being ‘whole’ too. In the meantime, supply parity with the multiples on SKU availability and substitutions is critical for UK wholesalers to help keep the UK fed.”