The joint Managing Director of Pricecheck doesn’t worry too much about economic downturns. The wholesale business, which distributes fast-moving consumer goods and sells end-of-line stock to the retail sector, was forged in the Great Recession of 2008.
‘My sister and I took over from our parents in 2007,’ says Mark Lythe, the company’s second-generation joint Managing Director. ‘It grew quickly after that, partly because we’re counter-cyclical. There is more distressed stock and more demand for discounted goods when the economy hits reverse.’
A second reason for Pricecheck’s rise over the past decade is the soaring fortunes of discount retailers, which form a large part of its customer base. A third is its relatively new focus on exports. Before 2007, selling overseas happened on an ad hoc basis; for example, when the team bumped into a foreign buyer at a trade show.
But by 2012 the Lythe siblings had implemented a solid strategy for selling abroad and each target market had its own unique approach. They signed up for government schemes such as Passport to Export and sought help wherever it was available.
‘We did a lot of research into each country before we tackled it. Since then we’ve grown the export side of the business dramatically. Although the UK market has been strong for us the business is benefiting predominantly from overseas activity,’ says Lythe.
In 2007, the business enjoyed almost £20 million in sales with £2 million coming from exports. Last year, sales were £55 million with £22 million in exports. Projections for the current year show sales of £70 million with exports at £32 million – an increase of 45% from last year, says Lythe.
He adds: ‘We got to the point where we knew most buyers in the UK. We had a very good range of contacts, but the world is a massive place and our product lines are generally well known internationally. So the growth opportunity was much bigger in Europe and beyond.
‘We have a sales team of 22 people now, with 11 international account managers, each with their own support staff; they are responsible for serving each territory. Our sales strategy is geared towards face-to-face meetings. We find that’s still the best way to sell, so our people do a lot of travelling.’
Pricecheck, a client of Grant Thornton’s Growth 365 service, is picking up plenty of business: £4.5 million in Holland, £3.9 million in Ireland and just over £1 million in Spain this year. Its involvement in Spain was negligible before it worked with the UK Department for International Trade to research the market and recruited Spanish linguists. ‘That helped enormously,’ says Lythe.
Pricecheck’s expansion also focuses on product lines, which have grown from health and beauty into household goods, food, alcohol and pet care. Brand owners use Pricecheck to distribute products into new channels and markets. The company is targeting £100 million in annual revenue by 2020, half of which will come from exports.
With plans like these, the uncertainty of Brexit is never far from Lythe’s mind: ‘Until we all know more about what Brexit will look like, our strategy is to target non-EU export markets and grow quickly in them. Europe is still our biggest export market, though, so we’re not going to stop doing business there.
‘To mitigate risk, we plan to open a European subsidiary so the customer still enjoys the seamless experience of an EU transaction. We will transfer stock from the UK and cover the potential Customs clearance and tariff costs for our customers.
‘At this stage it’s a concern but we’re taking steps to mitigate the downside and with Pricecheck’s flexible business model we also expect many positive sides to Brexit.’
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