Wholesalers consider ditching PMPs over continued squeeze on retailer margins

An increasing number of wholesalers are thinking of making more non-price-marked options available to retailers, following concerns over shrinking margins on price-marked pack (PMP) alternatives.

Bestway trading director Kenton Burchell told Better Retailing: “Where we believe the PMP price or the shared margin for Bestway and our customers is too low, we are considering listing non-PMP products to provide an alternative option for our customers.

“However, our preference would be for manufacturers to provide adequate margins with appropriate PMP prices, as we also see the strong benefit of PMPs in gaining consumer confidence and sales pull-through.”

Yesterday it was announced that Unitas has boycotted PMP treat bags from Mars Wrigley over “unacceptable” price increases.

EXCLUSIVE: Unitas ditches Mars Wrigley PMPs over squeezed margins

One symbol group managing director agreed, adding that a departure from PMPs “makes sense”. They said: “The cost of goods continues to increase. Retailers will always cherry-pick the cheapest PMPs. If there are two options, they will never take the most expensive.”

Ben McKechnie, managing director of Epicurium Wholesale, added: “We have never offered PMPs as they have never been suitable for the products we deal with. When Graze introduced PMPs, we maintained non-PMP and saw a drop in sales – but probably not as much as you’d expect.”

The comments come as Eden Farm Hulleys sales director Ben Lawrence told Better Retailing the company and “seven other wholesalers” were discussing ditching PMPs over a squeeze on retail margin.