Certainly, the early feedback I have had from retailers about Christmas is that it was a good one. My sales team also report very few Christmas products in discount baskets in stores, and our early January Sales are significantly up on the same weeks in early 2017. It does appear that, overall, the Christmas Goose has been fat for the speciality food sector.
However, let’s not be complacent. For many of us, our debtor/credit ratio is higher now than at any point of the year, as many retailers hold back from paying suppliers until after Christmas, whether that is due to lack of time or ascertaining how good trading was, I don’t know. I suspect a bit of both. From my many years of experience, it is in January and February that the highest number of food businesses go into liquidation. Some of them know this is going to happen but try and make the most of the Christmas period of trading before calling in administrators. I would caution you to be as diligent as you can be in collecting your debts at this time of year. Ensure you are first in the queue for payment, just in case, in a few months the worst is to happen.
I noticed Mr Sherick’s Shakes liquidated their business just before Christmas. From what I read, the business was trading well, with several new deals signed during 2017 and several more lined up for 2018. Sales were growing, and to many of their employees it would have seemed that the business was going well. I am reminded of that old saying, “Turnover is vanity, profit is sanity”. It is pointless growing a business unless the margin is also growing, and sadly several companies within the sector do not seem to have realised the folly of this. It is also true that quite often profitable, growing companies go out of business due to cashflow. Almost that they are so excited about the growth, they forget to collect their debts. It can be easy to let debtors get out of control in your businesses, producers. I would be lying if I said that our finances had always been run as a tight ship at Cotswold Fayre, but now they are and even if it sometimes means that customers go to another wholesaler with very flexible payment terms, I know that cash is king in business, and it is not unreasonable to ask customers to pay 30-60 days after they have had the goods. After all, the money has often gone through their tills a long time before that!
So, when trading can be slower after Christmas, make sure you get on top of your finances. Doing that will enable you to invest more into growth in 2018, which promises to be a good one.