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Tough times for hauliers in retail as growth slows

17th January 2008
Page 36
Page 36, 17th January 2008 — Tough times for hauliers in retail as growth slows
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Which of the following most accurately describes the problem?

Low profit margins have long been an issue for hauliers, but this is more true when working for retailers than for businesses in almost any other sector.The pressure on profits is unlikely to lessen in 2008 and although the predicted crash in retail spending has not yet materialised,retailers are not likely to be offering any New Year presents to the hauliers they rely on — despite the fact that UK retail spending has been going up for several years.

Diversification

Some hauliers are responding to these tight margins by attempting to move into other areas. Among these is TDG, which has made no secret of its strategy of developing business in specialist areas such as chemicals and paper and packaging where the profit margins are more palatable.

But for those hauliers that continue to make their living from the retail sector, the prospects for 2008 are not entirely gloomy. Widespread predictions of a poor Christmas appear to have been proved wrong (again) by a burst of lastminute shopping.And if there has been a slow-down in retail growth in recent months,there is still growth.

The CBI's latest Distributive Trades Survey reveals that in the first half of November,for example, 38% of respondents said sales were up, against the 25% who said sales were down.The CBI interprets this as a figure of +13%, which is in line with the three months to the end of November (at +12%).

Nonetheless retailers feeling pressure on prices are going to be tougher than ever on their suppliers.

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