In November 2000, Allfood Holdings acquired Wragg Food Distribution Ltd., a wholesaling company supplying the retailgrocery trade. Operating activities were centred on six warehouses that supplied around 2000 retail grocery outlets with a comprehensive range of mainly food goods categorised in market goods (25% ofturnover), provisions (15%) and propriety goods (60%). Many of the retailers were small grocery shops (customers for more than forty years) but Wragg also supplied large independent grocery retailers.Critical issues
A huge issue concerned the warehouse management. There was no common pattern of management or organisation which means that there was little contact between depots and each managerhad developed his own methods of management with a great degree of autonomy and a minimum of head office interference (no performance targets were ever set). Only depot managers at Cambridge andOxford appeared to be of a higher calibre and more involved with company policy matters. Another issue was linked to the high warehouse inventory range which amounted to about 4,000 individual productlines. In addition to this, several of the warehouses were ill structured imposing severe physical restrictions on the staff and creating a significant level of labour inefficiency. A further problem wasfrequent re-ordering and an excessive proportion of small orders with a special charge of £5.0 which did not compensate for the additional cost involved. This is problematic as having only littlescope for price reductions, competition between wholesalers is largely confined to customer service and Wragg would risk losing customers if it restricted the number of orders per week. Another problemwas the wide differences in the efficiency of the sales operation: The warehouse in Northampton for example had the highest number of customers per salesperson (55) but the lowest annual turnover per...