Food wholesalers spend heavily on IT

Feature

Food wholesalers spend heavily on IT

Business Focus is a weekly column providing at-a-glance statistics and commentary on spending priorities and trends in particular sectors. This week we look at food and drink wholesalers.

Food and drink wholesalers spend well above the UK average on IT, with large wholesalers investing £12,836 per desktop each year - more than 50% higher than the all-industry average of £8,455.

Among smaller food wholesalers, the average spend per desktop is £3,839, which is well clear of the all-sector average spend of £3,132 for small and medium-sized enterprises.

Supply chain efficiency is the top IT priority for food and drink wholesalers. As e-procurement initiatives increase, supplier agreements are monitored in real time and optimised, and warehouse operations are consolidated and rationalised. Management and operational improvements are also important to wholesalers, with mobile working a key route to enhancing productivity and improving customer service.

Spending by food wholesalers also outstrips IT spending among the food retailers that they supply. Large food and drink retailers spend £10,620 per desktop - more than 20% less than large wholesalers.

Larger food wholesalers are markedly big spenders on hardware, with nearly 33% of their IT budget being swallowed up by investments in high-specification back-end systems to support the supply chain.

However, larger wholesalers spend proportionally less on services (30%) than the UK-wide average (36%). This is perhaps not surprising given that supply chain systems are a core part of the wholesale business and can be a key competitive differentiator among companies, making firms less likely to outsource them than businesses in other sectors.


Methodology

The analysis is based on Computer Weekly's database of more than 60,000 IT budget holders, twice yearly user IT expenditure surveys, CBI/Kew senior executive surveys, government surveys, government demographic data, HM Treasury economic forecasts and Cambridge Econometrics industry sector forecasts.

Further details

http://www.kewassociates.co.uk

Comment on this article: computer.weekly@rbi.co.uk


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This was first published in November 2006

 

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