Equipment industry faces up to biggest fears

Unscrupulous main contractors, inadequate banking facilities and a propensity among end-users for cheap product.

Those are all challenges that threaten the catering equipment industry’s progress in 2012, according to senior experts in the market.

Most equipment suppliers and dealers hope that the sector will continue to stabilise after the peaks and troughs of the last few years, but it appears much will depend on how certain scenarios play out.

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David Bentley, design partner at The Russell Partnership and chairman of the FCSI, says one of the biggest challenges the equipment industry has got as a whole is main contractors in the building market.

“We are seeing a lot of value engineering at the moment that isn’t necessarily value engineering — it is changing specifications for the betterment of profit,” he says. “We work very closely with clients to make sure that when they walk into a kitchen it is what they want rather than something we have just dreamt up. They are spending the money so it is about making sure the specifications are adhered to really.”

The ability of end-users to get hold of funds in the first place remains a major constraint, according to Garry Smart, boss of Cater Wight and chairman of Cedabond.

He says many customers are repairing rather than replacing, particularly outside the more resilient London market.

“Customers are either acting cautiously or they can’t get hold of the money to replace. Even leasing has got tighter. One stumbling block for growth is that SMEs can’t get hold of any cash. A customer can ask the bank for £20,000 to refurbish and he could have been in business for 20 years but the answer will be ‘computer says no’! Or it will be ‘computer says yes but at 18%’!”

Keith Warren, director of CESA, believes the primary challenge facing the industry is being able to convince operators to invest in more sustainable equipment using the right life-cycle cost assessment tools.

“At the point of purchase, the tendency can be to go for the cheapest option,” says Warren. “With catering equipment, there are teams of buyers who are charged with buying as much as they can for as little as possible and that can sometimes be against that company’s overall sustainability strategy. The more efficient equipment will tend to be more expensive than the less efficient equipment, which is what creates the dilemma.”
 

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