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Chep's monopoly has been broken and now the swords are drawn. What obstacles does LPR face in battling to win a significant chunk of British pallet hire? How likely is it to get some big name suppliers on board? Elaine Watson reports
When it comes to pallet hire, there are just two serious players in the UK. In the blue corner is Chep, undisputed market leader with 30 years' experience, 26 million blue pallets in the UK and an fmcg client list to die for.
In the red corner is Gallic pretender LPR (Le Pallet Rouge), the new kid on the block, with just over a year's experience in the UK, just 250,000 red pallets and a somewhat thinner contacts book. On paper, the odds are stacked up against the newcomer. But could the underdog inflict a surprise defeat on the UK heavyweight?
The prospect is not as absurd as it sounds. For a start, a monopoly situation - in pallet hire or anything else - is not healthy and there is an enormous amount of goodwill from the supplier community towards any new entrant to the market, says LPR s UK managing director Jane Gorick.
Secondly LPR has a simpler, more attractive business model, she says. "Customers like our service because we let them concentrate on their core business by taking responsibility for pallet delivery collection and repair."
This a matter of opinion, of course, although LPR's success so far - it has picked up 1.5% of the UK pallet hire market after little more than a year in business here - suggests there is some support for its business model.
To be taken seriously however, LPR needs a premier league, blue chip fmcg client on its books, and, more importantly full support from retailers - a major sticking point for LPR according to one industry source.
"The main problems in the UK have been Asda and Sainsbury; that's what stopped progress. Sainsbury was pro-LPR on principle, but as it was in the middle of restructuring its RDCs, it was reluctant to try anything that would bring further disruption.
He adds:"Until LPR had Asda on board, there was no way the big boys were going to touch it."
'Standard pallets, minimum fuss'
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