A. F. Blakemore & Son Ltd.

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A. F. Blakemore & Son Ltd.

Long Acres Industrial Estate
Rosehill
Willenhall, West Midlands WV13 2JP
United Kingdom
Telephone: (44 01902) 366066
Fax: (44 01902) 602361
Web site: http://www.afblakemore.com

Private Company
Incorporated: 1917
Employees: 5,000
Sales: £600 million ($1.1 billion) (2006 est.)
NAIC: 424410 General Line Grocery Merchant Wholesalers; 424820 Wine and Distilled Alcoholic Beverage Merchant Wholesalers; 424940 Tobacco and Tobacco Product Merchant Wholesalers

A.F. Blakemore & Son Ltd. is one of the United Kingdom's leading wholesale grocery and Cash & Carry companies, and is also a leading operator of convenience stores. The company's Blakemore Wholesale subsidiary is one of the United Kingdom's top ten operators of Cash & Carry warehouses, with seven stores in Bangor, Barnsley, Birmingham, Grimsby, Newport, Walsall, and a state-of-the-art flagship depot at Wolverhampton. Blakemore is also the top wholesale supplier to the SPAR UK network of independent grocers, delivering to more than 700 customers in England and Wales. The group's SPAR wholesale operation covers the Central Meridian Guild zone, spanning East Anglia, North Wales, and reaching into Lincolnshire.

Rounding out Blakemore's wholesale operations are its Blakemore Fresh Foods subsidiary, which supplies butcher meats and other fresh products; and Blakemore Food Service, dedicated to supplying the restaurant, school, and institutional foodservice markets. Blakemore Food Service is the fifth largest and one of the fastest-growing foodservice supply specialists in the United Kingdom.

The increasing dominance of the major multiples over the U.K. supermarket sector during the 1990s led Blakemore to establish its own retail operations. This was accomplished through the acquisition of Tates Ltd., the largest operator of Spar-branded convenience stores in the country. Through Tates, Blakemore controls more than 200 SPAR stores throughout North and Central England and Wales. In addition to its retail and wholesale operations, Blakemore operates Complete Shopfitting Ltd., providing construction and outfitting services to the convenience store sector; and Blakemore Print, which provides printing services for the Blakemore group of companies as well as third-party customers. Founded by Arthur Blakemore in 1917, AF Blakemore remains wholly owned by the Blakemore family. Peter Blakemore, grandson of the founder, is the company's chairman. In 2006, the company's sales topped £600 million ($1.1 billion).

FROM GROCER TO WHOLESALER IN THE FIFTIES

A.F. Blakemore & Son was established by Arthur Blakemore in Wolverhampton in 1917. Blakemore's business started out as a small traditional grocer's shop, providing counter service from a space of just 350 square feet. In 1929, Blakemore was joined in the business by his son Frank. Over the next decades, the company evolved from its original retail focus to become a prominent regional wholesaler.

A major step in this direction came in 1962, when Blakemore opened its first Cash & Carry store in Wolverhampton. The company quickly established itself as a major supplier to the independent grocery sector in the region. By the early 1970s, the company began to seek a larger expansion of its Cash & Carry business, and in 1971 joined in the creation of the Landmark group of Cash & Carry wholesalers. Over time, Blakemore expanded its Cash & Carry operations into a number of new markets, including Walsall and elsewhere. By the end of the 1980s, Blakemore operated six Cash & Carry depots, and by the dawn of the 21st century had emerged as the country's seventh largest Cash & Carry groups. Not all of the group's efforts to expand the Cash & Carry business were equally successful. In 1991, the company attempted to enter the Manchester market, buying a 48,000-square-foot facility in Worsley, only to shut down that operation in 1994. Similarly, the company acquired a smaller facility in Mexborough, in South Yorkshire, in 1991; this site too was closed in 1994.

Blakemore's focus on the wholesale market led it to become part of the SPAR UK network in the 1970s. The SPAR format had originated in the Netherlands in 1932, formed as a buying cooperative among a group of independent retailers. The SPAR concept quickly caught on, allowing independent grocers to compete against fast-rising retail groups such as Albert Heijn and others. By the 1950s, SPAR had begun its international expansion, as SPAR cooperatives were created in Germany and elsewhere. SPAR reached the United Kingdom in the second half of the 1950s when a group of five wholesalers successfully bid for the SPAR franchise for the country. Blakemore joined the SPAR group in 1975 and emerged as one of the largest of the SPAR wholesalers, taking control of what became known as the Central Meridian Guild, a region that spanned from East Anglia to North Wales, while reaching into Lincolnshire.

FRESH FOODS IN THE EIGHTIES

In the United Kingdom, the SPAR format grew to focus especially on the convenience store sector, which had begun to grow strongly during the 1970s and into the 1980s. That period saw a dramatic shift in consumer buying habits, as the major supermarket groups came to dominate the retail grocery market, placing increasing pressure on the country's small and independent grocers. Yet the changing job market, as women entered the workforce en masse during this time, provided new opportunities. This was particularly true in the convenience sector, as new store formats, featuring longer opening hours and a specialized range of prepared and precooked foods and other grocery items, were created to cater specifically to the needs of the working population. Among the major convenience store groups to emerge during this time was Tates Ltd., which grew into one of the United Kingdom's largest operators of SPAR-branded convenience stores.

Blakemore also invested in developing a more specialized range of wholesale services in the 1970s and 1980s. Into the 1970s, the company had expanded its Walsall Cash & Carry facility to include its own butcher's department. In 1975, the company extended this operation to include a larger selection of fresh foods. The growth of this fresh foods business in the late 1970s and early 1980s encouraged the company to move its fresh foods operations to its own dedicated facility, built in Willenhall in the mid-1980s. The decision helped position Blakemore at the leading edge of the wholesale sector as demand for fresh food items from the convenience sector and other retail grocery channels surged in the 1990s and 2000s. The rising demand led the company to create a dedicated Fresh Foods division by the turn of the century.

COMPANY PERSPECTIVES

A.F. Blakemore & Son Ltd. has built its success upon a strong sense of community and commitment to its loyal workforce. The company will remain true to these traditional values as it moves into the ever-changing retail marketplace of the 21st century.

While Blakemore's focus remained on the wholesale market, it had also begun developing an offshoot business in the closely related foodservice sector. The company formed its own Food Service division in 1975, supplying the schools, hospitals, and other areas of the institutional sector, as well as restaurants, hotels, and the like. In the late 1990s, the company had decided to step up its foodservice operations, and by 1999 had launched an expansion of the division. This effort enabled the company to claim a spot among the United Kingdom's top five foodservice suppliers by the middle of the first decade of the 2000s.

U.K. CONVENIENCE LEADER FOR THE NEW CENTURY

Amid the difficult economic climate of early 1990s, the United Kingdom's major multiples began seeking new avenues for expansion. Increasingly the large supermarket groups had begun to display an interest in entering the convenience sector, one of the country's fastest-growing grocery channels. In order to protect its position as a major wholesale supplier to the sector, Blakemore, like a number of other wholesalers, began to develop its own operations on the retail side of the convenience market. For this, the company remained within the SPAR group, building up its own network of 35 SPAR convenience stores into the early 1990s.

Blakemore's emergence into the top ranks of the convenience sector came in 1994, when the company agreed to pay £17 million to acquire Tates, then known as Tates Lateshopper, from Kwik Save. That deal added more than 70 stores to Blakemore's convenience operations, expanding its business into the East Midlands, Humberside, Yorkshire, and Lincolnshire markets.

One year later, Blakemore had expanded its convenience store operations again. In April of that year, the company joined with four other wholesalers within the SPAR group to buy 150 convenience stores from Argyll Group. Blakemore's share of the acquisition, which came at a total purchase price of nearly £20 million, added 62 stores under the Presto and Lo Cost banners. The company then began converting its new stores to the SPAR format, and ultimately transferred all of its retail convenience store operations to its Tates subsidiary.

With control of more than 150 convenience stores of its own by the turn of the century, Blakemore continued to expand its SPAR-based wholesale operations. In 2000, the company formed a new buying consortium, called the Multiple Retail Group, with the goal of signing up some 600 convenience store operators. In this way, the company hoped to form a strong defense against the renewed efforts by Britain's major retail groups to enter the convenience sector.

Blakemore also launched a recruiting effort, particularly in the city center markets, in order to add as much as 50 new independent operators into the SPAR network in its wholesale zone. At the same time, Blakemore announced plans to expand its network of company-owned stores, initially targeted at up to 100 new stores by mid-decade. For this effort the company expected to spend as much as £18 million. As a result of its expansion efforts, the company's Tates subsidiary became one of the fastest-growing players in the U.K. convenience market by 2002.

The company also took steps to boost its Cash & Carry division. The company added a new depot in 2001 through the acquisition of Mogford & Sons, located in Newport, in south Wales. The purchase gave the company a new 37,000-square-foot facility. The company then expanded its operations in Wales with the purchase of John Edwards, based in Bangor, in 2002.

Blakemore's Cash & Carry operation and its SPAR wholesale business showed increasing signs of convergence into the middle of the first decade of the 2000s. At the dawn of the 21st century, the company had begun developing a delivery service based at its Cash & Carry depots. By mid-first decade, nearly all of its Cash & Carry depots had begun to provide delivery services. As a result, the company changed the name of the division, creating a new subsidiary, Blakemore Wholesale in 2004.

By then, the company had further expanded its overall wholesale capacity with the construction of a new £5 million, 70,000-square-foot headquarters and Cash & Carry facility in Wolverhampton, completed in 2003. The following year, the company further expanded its range of products when it bought McColls, a specialist in the wholesale confectionery distribution market.

KEY DATES

1917:: Arthur Blakemore opens small grocer's shop in Wolverhampton.
1929:: Blakemore is joined by son Frank.
1962:: Blakemore opens first Cash & Carry store.
1975:: Company becomes major partner in the SPAR UK wholesale network.
1994:: Blakemore enters retail convenience store operations, then acquires Tates network of SPAR convenience stores.
2004:: A 70,000-square-foot Cash & Carry center and headquarters in Wolverhampton is completed, and that division is renamed Blakemore Wholesale.
2007:: Tates tops 200 convenience stores, becoming the leader of that sector in the United Kingdom.

The company also remained on the lookout for new expansion opportunities for its convenience store outlet. In 2004, for example, the company entered the central London market, buying four stores from Lords Food & Wine. These acquisitions followed on the company's construction of two new stores in Lincoln and Leicester. By 2007, the company's Tates convenience operation had topped 200 stores. With revenues of more than £600 million, AF Blakemore & Son's two-pronged approach to the wholesale and retail convenience store markets had allowed it to grow into one of the United Kingdom's leaders in both sectors. Yet the company remained firmly committed to its legacy as a family-owned company.

M. L. Cohen

PRINCIPAL SUBSIDIARIES

Blakemore Food Service; Blakemore Fresh Foods; Blakemore Wholesale; Complete Shopfitting Ltd.; SPAR UK; Tates Ltd.

PRINCIPAL COMPETITORS

Booker Cash and Carry Ltd.; Princes Ltd.; Batleys Ltd.; Hanover Acceptances Ltd.; Costcutter Supermarkets Group Ltd.; Angliss International Ltd.; Farmfoods Ltd.; James Hall and Co. (Holdings) Ltd.; Dhamecha Foods Ltd.; Capper and Company Ltd.