Switching parts: spares sector market moves under the microscope

First Choice feels that its acquisition by Parts Town gives its dealers a wider availability of OEM spares.

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With several major business moves altering the UK spare parts supplier landscape over the last couple of years, dealers could be forgiven for being confused as to who they should now be liaising with and how these consolidations will affect them.

One major buyout in the spares market was First Choice Group’s acquisition last year by PT Holdings, the parent company of US spares giant, Parts Town.

First Choice sees many positives resulting from its relatively new owner. MD John Whitehouse analysed: “The recent spare parts market consolidations have added significant value to First Choice via stock investment, giving our dealers a wider availability of OEM spares. This has improved our overall service level and in turn customer repair times.

“Our acquisition by Parts Town has also given us improved technology and investment to increase stock and improve the customer experience. The app technology can only be seen as giving added value e.g. easier info for parts identification.”

Distributor interaction has improved following the changes, according to Whitehouse: “It has given us even more focus on our distributors and we are working closer than ever. Through technical innovation and new tools we have introduced, including our web chat and electronic enquires app, we are meeting customer needs and have an increased connection with distributors. We hope this continues to grow and evolve over the years to come, learning from shared skills and best practices, pulling on the experiences of the Parts Town Group.”

He further explained: “At First Choice we have been constantly evolving and making changes for the last 4-5 years to ensure the customer is at the forefront of what we do and why we do it. Being part of a larger entity hasn’t changed our focus on our company core values. We are as passionate as ever and our customers are still at the heart of our business. We at First Choice remain positive and believe our merger with PartsTown, the world’s largest in stock inventory of OEM commercial spare parts, gives us greater access to OEM parts and manufacturer relationships.”

CCS’s CEO Jonathan Booth believes his firm can now cater
to a wider segment
of customers.

Another of the main new tie-ups was UK-based Commercial Catering Spares (CCS) being acquired by German-headquartered GEV, which then in itself became a sister company to competitor LF Spares in April thanks to its owner, private equity firm Riverside, purchasing a controlling stake in the the Italian firm.

Catering Insight spoke to CCS CEO Jonathan Booth about whether he feels these consolidations have impacted dealers: “In the middle of a changing and globalising industry, we at Commercial Catering Spares are sure that the consolidation was the only possible next step in order to strengthen our position on the market and offer a better service to our customers.

“By partnering with GEV, we now own the largest warehouse in Europe as well as the know-how for all product groups within the catering equipment segment. As they can still rely on us as their partner plus benefit from the positive effects of the consolidation, we expected to increase the positive interaction and feedback from our customers.”

Booth emphasised that the merged firm will still stick to the reasons for its success: “These are: a huge segment of spare parts for catering and cooking, investing in new technologies in logistics and our supportive customer service team.”

GEV owns the largest catering spares warehouse in Europe.

He added: “With the backing of GEV and an increasing range of original items, CCS can now cater to an even wider segment of customers by meeting the needs of small and larger dealers alike. As honesty and reliability are two of the key factors of success to us, we informed our customers right from the beginning about new business possibilities and the changes they will benefit from: we increased the stock and technologies in our warehouses and offices and offer now a wider product range and availability at any time while the customers can still rely on the same customer service team helping them at any point.”

But how have dealers have responded to the consolidations? According to Booth: “After initial reservations, our customers clearly benefit from the many positive aspects of the consolidation between GEV UK and Commercial Catering Spares.

“The one stop shop makes it easy for them to buy all parts at a time, from brands within the UK as well as from European brands. Our dedicated customer service team is always on side to support with their technical expertise. With over 80,000 items in stock, focused on original spare parts, we are keen to comfort our existing customers even more and are able to win new partners as well. To sum it up: the feedback we get from the dealers is very positive and we look forward to meeting their needs in the future as well as today as in the past.”

For the UK branch of LF, the third party in this enlarged group, it’s still business as usual. UK director, Mark Brooks, detailed: “Distributors have been somewhat confused by all the market moves but I think there is greater clarity now. Basically they can see that they are still dealing with the same personnel and parts with the expectation of greater service levels with increased stocks and technical help. We still get the right part to them next day.”

LF Spare Parts underlined it still ships parts for next day delivery from its Italian base.

He emphasised: “With LF, CCS and GEV coming together in the UK, dealers now have a one stop offering which includes the OEM style offering but includes OCM (original component manufacturer) parts also. This will give greater flexibility for the dealers when choosing parts.

“This new group also brings together a huge amount of technical information and market knowledge across all UK foodservice sectors and is hugely exciting for all those involved in the company and also for the dealer/distributor market.”

In terms of industry reaction, Brooks reported: “The whole market has been supportive of what we are doing. For the larger dealers there is the expectation of even better service levels, more investment in stock and technology and the growth of the breadth of stock available. It is recognised that each of LF, GEV and CCS have their own points of difference and the coming together creates something unique in the UK spares market.”

On the First Choice Group deal, Brooks added: “The acquisition of FCC by Parts Town has led them further down the ‘OEM’ parts road and it will be interesting how this pans out medium term.”

An independent view

With all the big beasts forming the majority of the UK catering equipment spares industry, what does this mean for smaller competitors?

At warewasher spares specialist, Caterparts, national sales manager Robin Coates believes: “Recent consolidations have reduced the customer choice in the marketplace. Caterparts is currently the largest independent UK controlled supplier of spare parts remaining.”

Warewasher spares supplier Caterparts is now the largest independent parts firm in the UK.

He continued: “What we never want to lose sight of at Caterparts is that sometimes you need to talk to a human being and not just rely on a computer or multiple phone options, so we ensure we have a sales desk manned by people who care and want to help any customer.”

Coates feels that the future is positive for independent spares suppliers who continue to listen to customers and tailor their offering to those that support the spares sector. “This market is best served by those who continue to invest in gathering and presenting relevant information,” he said.

“Expectations by customers, in any market sector, are now primarily dictated by speed and reliability of service. Those who wish to grow must equip themselves to be able to deal with these challenges.”

When the Caterparts team have talked to the market about the big mergers, Coates reported: “There have been mixed views from both dealers and distributors offering onsite maintenance services. In discussion with these operations they have understood change is inevitable but remain optimistic that the level of service will remain unchanged. They are waiting to see if the consolidations and acquisitions will result in changes in approach, operating practices and how prices and discount structures may be adjusted.”

The way ahead

Catering Insight asked UK catering spares suppliers to predict where the sector will go next.

For First Choice Group MD John Whitehouse, the market is heading in two directions: OEM versus non-OEM. He outlined: “Our goal and strategy is to continue the direction of OEM parts only and even closer manufacturer ties with innovative logistics solutions to give our customers an even faster service.

“Technological advances will mean our one stop solution becomes even more popular within the whole market.”

Over at independent supplier Caterparts, national sales manager Robin Coates analysed: “For many years the UK independent spares market has been driven by UK companies, namely First Choice, Commercial Catering Spares and Caterparts. With the recent mergers and acquisitions, will the UK market see a more Pan-European and American approach? Brexit will play an interesting part in where the market will end up, while customer service and the ability to turn parts around promptly will remain the key factors.”

While LF Spare Parts’ UK director, Mark Brooks said: “I believe there will be a period of calm whilst we settle our strategies for the UK. There are some big beasts in the spares market globally so more acquisitions cannot be counted out.”

Elsewhere, CCS CEO Jonathan Booth forecasted: “Not only in the UK, but also worldwide we will likely see further digitalisation in the catering spares market.

“CCS, as partner to GEV, has responded to this challenge by investing heavily in new technologies and the improvement of existing ones, especially webshop services and logistics for an efficient order delivery process and customer satisfaction. For example, soon we will be offering OEM and OCM parts in one single webshop, so customers can profit from the greatest selection of original parts.

“By not only selling spare parts but offering a complete service package, our always customer orientated service team clearly makes a difference to other providers on the market.”

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