The food and drink sector hasn’t fared well in this year’s Hot 100, with just two companies making it onto the list.
Eastenders Cash & Carry (89th) was founded in 1989 by east-end boy, Dave West. He set up a huge warehouse near the Calais ferry port to cater to “booze cruisers” looking for a bargain on alcohol and tobacco. It’s now the largest British-owned cash and carry in Europe. West runs the business with his son, also called Dave, and has grown the business organically to a turnover of £101.5m last year. But it hasn’t been easy for the pair: “When we lost 40 per cent of the value of the pound to the euro, it hit the business,” says Dave West Junior. “And it’s not as cheap to come over on the ferries anymore. You used to be able to come over for a couple of quid.”
But the father-and-son team have been quick to adapt to the tougher trading conditions: “People aren’t after the cheapest plonk any more,” he continues. “And they’re moving away from beer to wine. If they want it, we’ll stock it: we have increased our range of wines from 100 to 1,000.” The firm avoids distributors, buying its products direct from the source to bring prices down for its customers. “This might be a bad year, but we’re not giving up,” says West. “We’ll start coming out of the downturn within 18 months.”
Niall MacArthur, the founder of sandwich chain Eat (96th), is also looking on the bright side of the recession. “Property is cheaper and the market for good quality food is still strong,” he says. “Not many people are trading down from us to the supermarkets. But plenty are trading down to us from over-priced delis and restaurants.”
Ironically, MacArthur never actually planned to launch a sandwich chain. He wanted to get into coffee, just like Starbucks. “I’d seen two on the same street in Vancouver,” he says. “Starbucks’s growth was phenomenal.” But when the former investment banker put together a business plan to launch a copycat outlet back in London, he soon found a flaw in his scheme.
“I couldn’t work out how to make a profit doing coffee with London occupancy costs,” MacArthur explains. “So I decided to do food instead.”
He launched the first branch of Eat near Charing Cross station back in 1996. Nearly 13 years later, he’s pulling in sales of £68m and profits of £3.9m. And, quashing any rumours of an imminent trade sale, MacArthur reveals that he plans to grow the business to a 200-strong chain by 2011.