Stobart warns customers of ill-effects of BOGOF offers
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By Christopher Walton STOBART GROUP has called on its retail customers to understand the effect that bulk-buying offers are having on their supply chains.
Speaking to Commercial Motor, chief executive Andrew Tinkler says that two-for-one deals that supermarkets have used to entice customers as sales get tight have had an adverse effect on the operator’s leet utilisation. “The way people are buying is more volatile now than during the recession, and retailers are offering more deals to get people through. This puts more pressure on logistics. When they put a two-for-one offer on, they want it immediately as it is the most important thing on the shelf.
“We are now running that out much better to give [Stobart customers] the service and it might have an effect on empty miles,” he explains.
Fleet utilisation in Eddie Stobart has taken a small hit in the past 12 months because the operator has taken on new contracts – particularly with AG Barr, Britvic and Tesco.
The warning comes after Stobart unveiled an 11.7% revenue rise for the year ending 28 February. Its turnover, including contributions from its multi-modal divisions and its core Eddie Stobart transport division, rose to £500m from £448m a year ago, mainly the result of new contract wins. However, pre-tax proit fell slightly to £29.5m, from £33.3m a year ago, because of exceptional gains on property made last year.
Furthermore, Stobart’s biomass joint venture with AW Jenkinson has signed a £90m, 12-year biomass supply and logistics contract with Iggesund Paperboard, part of Swedish forestry giant Holmen. The deal will see Stobart Biomass provide sourcing, supply and logistics for biomass fuel at Iggesund’s paper mill in Workington, Cumbria. Work on the contract begins in the irst quarter of 2013.
● Tinkler says in his year-end report that the Channel 5 TV series Eddie Stobart: Trucks & Trailers helped to showcase the business to a new audience. With the series back on Channel Five, you can follow our live blog of each episode at Roadtransport.com/blogs.