Suttons Seeds expresses early discounting concern

Suttons Seeds managing director David Robinson has warned that early discounting of next season's stock could be dangerous for the industry.

David Robinson
David Robinson

Suttons latest accounts show actual underlying product margin showing a two per cent improvement to 53.4 per cent.

Robinson said: "This is due in large part to better stock forecasting, planning and the proactive management of discounting in the direct side of the business.

"This margin improvement has come against a backdrop of increasingly heavy discounting of packeted seeds by competitors. Suttons are conscious of the demands of operating a multi-channel business and rather than following competitors, intend to continue to strictly manage any online discounting of branded seeds in order to avoid adversely impacting their partners in garden retail."

Robinson said online discounting of 2016 stock by competitors had begin in early October. 

He said: "I can understand discounting at the end of the season, but before the new season launches just feels wrong for the industry."

Robinson said he had a particular bugbear with Black Friday deals offing 50 per cent off seeds.
He added: "It doesn’t sit easily with me before retailers have the chance to get them. This seems to be growing and could be dangerous for the industry."

Robinson said Suttons is looking to join channels up more and sees opportunity in the retail area.

Suttons accounts from July 1 2013 to November 30 2014 showed an operating loss of £2.9m, but after a management buy out, new audited accounts for the eight month period from December 1 2014 to July 31 2015 (Suttons new financial year end). These will show an operating profit of £500,000.

The first year’s MBO business plan projected a £129,000 operating profit for the 12 months 1 July 2014 to 31 June 2015. The actual profit for this period is £203,000.

The 17 month published turnover to December 2014 was £18.8m.

The eight month published turnover to July 2015 was £11.2m

The first 12 months projected turnover to July 2015 was £13.6m whereas the actual over this period was £14m.

The company said the return to profitability and cash generation had enabled it to start a programme of long term investments including a £200,000 investment in solar panels on its Headquarter premises to reduce the company’s carbon footprint and provide a future income stream against a backdrop of low returns from cash reserves.

Robinson said: "We recognise the vital importance of having an excellent team of professional staff and have started on a programme of identifying and investing in key personnel to continue driving the business forward."

On Corporate Social Responsibility, Robinson said: "The directors of the business are very conscious of our responsibilities to our staff, customers, local community and the wider environment. Over the first 12 months since the buyout we have carried out a number of actions that demonstrate this commitment."

On the environment he said: "We have adjusted processes and worked with our retail and direct customers to considerably increase recycling and reduce waste. This has enabled us to adopt a ‘Zero to Landfill’ policy.

"We have invested £200,000 on solar panels to help reduce the carbon footprint of the business and provide a future income stream.

"Lighting has been converted to LED panels which improve light levels whilst considerably reducing costs.

"We have started planting up a 1.5 acre patch of grassland in front of our headquarters site to provide a richer environment for staff and wildlife.

"We are investigating ways of reducing our use of peat and are planning a further 25 per cent reduction over the next 12 months.

"Whilst the actions outlined above are good for the environment we firmly believe that they are also good for the future of our business. Most of the actions listed have had a direct positive impact on the current and future profitability of the business and going green has helped Suttons get back into the black."

On employees Robinson said: "We recognise the huge contribution of our staff in our return to profitability and as a result of the turnaround have been able to implement a number of actions including:

Increasing our minimum wage level by 14 per cent.

"Providing the first pay rise that the business has been able to afford for four years
Providing a £250 ‘Thank you’ bonus to every permanent member of staff.

"Over the next 12 months we are planning a number of actions to improve the working environment of our employees."

On the wider community he said: "We remain very grateful for the support we received from the local Mayor, Council and The Torbay Development Agency prior to the MBO and that we continue to receive today. This support has made it possible for us to retain Suttons in Torbay and to begin to rebuild the business.

"We work closely with a number of local and national charities and over the past eight months we have helped charities to raise over £117,000 towards their valuable work."

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