Lockhart MD reveals £100m ambition

It is a year since Paul Nieduszynski took the hotseat at Lockhart Catering Equipment and he has initiated some pretty dramatic changes as part of a new growth strategy the company has rolled out. Catering Insight hears why his job won’t be done until Lockhart becomes a £100m business.

Paul Nieduszynski will be the first to admit that he probably didn’t know an awful lot about the catering equipment industry this time a year ago. But he has sure had to learn fast after being handpicked as the man to put the fire back into the belly of Lockhart Catering Equipment.

Nieduszynski has spent all his career working in distribution businesses, cutting his teeth in the industrial and building materials trade. His last role was at Travis Perkins, where he was boss of its Birchwood Price Tools division, a £20m business when he arrived and £50m by the time he left.

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That track record of growth goes a long way to explaining why the absence of any catering equipment experience wasn’t deemed a drawback by his new employers. Far more pertinent to them was the fact he possesses firsthand knowledge of working with large national account teams and an understanding of product development, e-commerce and direct marketing.

But he also brought something else that the business desperately needed: a fresh pair of eyes. As Nieduszynski himself acknowledges, Lockhart has done a decent job of defending its strong national account presence over the past decade, but it has struggled to really push on past the £60m to £70m turnover mark.

Put that into the context of its chief rival Nisbets, which has gone from £30m to more than £190m during the same period and it is clear why he feels there is a missed opportunity that needs to be put right.

His first two weeks at the company involved meeting every single employee — all 235 of them — with the message that things were going to change for the better, though admittedly at the time it was too early to say how.

“I also wanted to use a bit less mouth and use a bit more ears and understand what everybody thought of the business,” he says of his early days in the role. “I think the one question I asked everybody was, ‘what do we need to do to grow?’ That actually gave me a lot of information — and a lot of opinions! The challenge then is to move from opinion to assertions about what you have got to do.”

Nieduszynski didn’t only rely on what his staff had to say, however. External research was commissioned to find out what customers and non-customers thought of the company, giving him the “raw data” to corroborate his colleagues’ views.

While that was happening, he also took the opportunity to restructure parts of the business, free up cash and create a new management board. The call centre at its main Theale office was consolidated with a similar facility in Tamworth, it contacted suppliers to solicit support financially for its new strategy and Nieduszynski went to its parent group to ask for funds.

It’s fair to say that not all his decisions were popular with everyone, but by January this year he was able to stand in front of employees and suppliers at the firm’s sales conference and unveil a new growth strategy. He also announced £1m of investment in the business and, crucially for staff, stated that there would be no further cuts.

“It was important for the team to know that we were now moving into a period of stability, growth and investment,” he reflects. “The other thing that was important was that we made some rapid progress to give confidence internally that we were changing and making progress, but also to show Bunzl Group that if we come up with a plan and ask for a large sum of money we are actually capable as a business and a management team of executing that plan successfully and can knock over some pretty fundamental changes very quickly.”

And it has most certainly done that. The company has completely changed its pricing structure, launched a new catalogue, introduced two more own-label brands, published new sales brochures and rolled out what Nieduszynski calls “the most aggressive price-based promotional material in the UK market”, including a ‘price match’ promise.

Additionally, it has implemented a CRM system, armed every sales person with an iPad to enable them to professionally present its offering and report back on activity, and invested in a database of some 600,000 catering establishments in the UK.

Improvements have been made to the service it provides, too, such as the announcement of a same-day delivery option in London and the extension of warehouse cut-off time from 5pm to 6pm. It has even modified staff working hours to allow customers better access to its teams by 500 hours a year. And if that isn’t enough the last few weeks have seen it welcome almost 30 new members of staff to the business, including a marketing director, a direct marketing manager and extra resource for its product development and e-commerce teams.

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Nieduszynski insists the mood in the business has completely changed over the past six months, while its numbers during the first half of the year have exceeded expectations. “From a business that has been relatively flat we are well into double-digit growth this year, which is fantastic to see,” he says. “The strategy is only really just kicking off from April time, but we have got a big mountain in front of us to climb in terms of sales and my ambition is to get the business above £100m.”

A fundamental part of Nieduszynski’s masterplan is making sure that Lockhart rubber stamps its mark as a “catering expert”. He sees it as a way to differentiate from the plethora of major product suppliers it competes with.

“If you look at the market, there are lots of consolidators where something else is their main business. If you take the food guys, such as Brakes and 3663, food is their main business and catering equipment is tagged on the back. Even in our own group you’ve got BCS where disposable cups and those sorts of things are its main business. If you take Alliance, blue centrefeed rolls, napkins and chemicals are its main business. Well, catering equipment is our main business.

“That is what we are experts in and my aim is to be significantly better than anybody else as a product expert in that area. And that flows through the knowledge within the people, it flows within the product range, our experience at sourcing from around the world, the great brands that we have got in our portfolio and all of the innovation they bring to market.”

Early signs suggest Lockhart is on the right path and some major client wins this year have certainly helped whet its appetite. It won back a £1m Pret A Manger contract from 3663 and has secured significant renewals from the likes of Whitbred, Compass, Sodexo and the Ministry of Defence.

The philosophy of being a product expert is only as good as the portfolio on offer, however, which is why the company has fine-tuned its proposition around two key areas: the price conscious shopper and operators striving to innovate and differentiate.

Lockhart recently unveiled its first ‘Price Busters’ brochure and campaign, launched to 400,000 caterers with the promise that its prices are the lowest in the market.

“What is behind that is a team of people working with the UK manufacturers, or the branded manufacturers, to make sure that we have got the right deals but also we are doing all the hard yards out in the Far East and South America to make sure that we have got the right sourcing and the right products at the right prices for customers. That is backed up by the bigger Bunzl Shanghai team to ensure quality control, quality assurance, CSR ethics and everything else. As a small business in a big group we have actually got some key support and advantages there.”

While this price-driven approach has enabled it to compete on more of an even footing with the likes of Nisbets, what it doesn’t necessarily do is give it substantial differentiation in the market, which is where the second aspect of the strategy comes in.

The other quarterly catalogue Lockhart has launched is ‘Trend Set’, which aims to provide chefs and F&B managers with choice and innovation when it comes to developing new menu items and ways of food presentation. It is geared more towards the volume market than fine dining, but is fully supported with its own interactive website.

Nieduszynski says his vision for the company is based on a five-year plan, which he will review every three to six months. He admits it is too early to tell what sort of impact initiatives such as Price Busters and Trend Set will have on its numbers, but is cheered by the fact that if Lockhart is growing faster than the market average then it indicates it must be winning market share.

“It would be lovely to think that all of the things in the strategy were creating the results, but in reality whenever you do a strategy like this some things work fantastically well and some things don’t, and you have to review those things and really look at where you are making investments.

“But we know from some of the direct marketing that we have done that we have created very positive results and we have also had some good wins with major accounts. That hasn’t been down to the strategy, that has been down to hard work from our sales team. But I do think that making the investment, having a clear strategy, raising the bar on expectations and really improving the morale of the business has created a wave of optimism and will to get out there and win.”

Staff, suppliers and investors who have brought into his vision will be hoping the momentum continues.

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Talking Business with Paul Nieduszynski

On Lockhart’s partnership with its major branded suppliers…

“My view is always to support our supporters. The relationship we have got with [our core suppliers] is particularly good, we support them, they support us. I think we have further opportunity to give them in that I don’t think their brands are particularly well penetrated in the regional market. I don’t think they have previously had the best channels, apart from the independent merchants, to really target that and I think we need to find a way of profiling their brands better to the non-national client base.”

On the suggestion that internally there is a culture of obsession with Nisbets…

“That does very much exist and it is really hard when you look at the long-term financials to see the Nisbets growth story versus Lockhart’s. It is almost painful for me and I am new, so if you have worked here 10 or 20 years it must be a very difficult thing. I think it is important to know what your competitors’ strengths and weaknesses are, and what they are doing, but it is more important to lead. What Nisbets has achieved is pretty phenomenal, so they are a very respected competitor in that regard. The business probably has had too much focus on what Nisbets is doing, but it is important not to follow what they do but try and create a position where we are leading and differentiating our business.”

On Lockhart’s performance since taking over the business…

“We have made a great start. The way I describe it is we are at base camp one and we are about to head off up the mountain, but it is a big climb in front of us and there will be lots of challenges and lots of routes to think about. But the team is performing really well now, the business is in good shape and I think having that solid foundation of good people and good service has meant that tweaking things like price and innovation has been a lot easier to do quickly.”

On his first year in the industry…

“I think it is a fantastic sector to work in. There is lots of innovation, lots of interesting product, there are some fantastic people in the sector and it is very well publicised if you look at the whole celebrity chef community, the events and the hospitality. I worked for the first 10 years of my career in industry and UK manufacturing, which has been in terminal decline. It is tough, lots of change programmes, redundancies and difficult stuff to do, but coming across into a sector like the HoReCa market feels very buoyant in comparison, and I think the combination of product and people is really quite special.”

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