FEA’s ‘State of the Market’ survey questioned 30 industry personnel drawn from a cross-section of manufacturers, distributors and importers, resellers, dealers and service companies about the dealer market, and their forecasts were fairly grim.
The respondents predicted a move towards the second-hand market, as well as some servicing firms seeing the proportion of repairs increase compare to replacement.
FEA chief executive Keith Warren revealed the questionnaire’s results during last week’s Specifi webinar, called ‘Ready for the Reinvention’.
Although these predictions indicating that operators will be sweating their assets more, the survey’s respondents conversely believe that the number of engineers dealers directly employ will be reduced.
Warren commented: “If there is a move towards service and more repair, obviously engineers are needed to do that. It’s going to be critical that we hold on to their knowledge and experience throughout this process.”
Financial concerns were also uppermost in respondents’ minds, with many predicting an increase in online sales for dealers, but that the market overall will shrink, with a number of casualties caused by a lack of cash or government support.
The salient payment issues were also discussed, with many of those surveyed forecasting more credit pressures to pay suppliers within terms or be pro forma, or pressure for increased discounts at the other end of the chain from operators, as well as cash flow problems across the board. Indeed, 60% of respondents reported experiencing problems with collecting payments from customers.
Other predictions included a reduction of external sales teams, with face-to-face appointments being rare, and an increase in individuals starting dealerships on their own.
Warren analysed: “It’s a difficult picture. There are currently about 1,200 UK distributors, with many manufacturers having up to 700 live dealer accounts, so we are probably looking at significant contraction there.”
The survey also covered expectations for the manufacturer and supplier market sector, with key forecasts once again focusing on the rise of second hand equipment, a refocusing on after sales service, diversification, credit being tight, reductions in sales teams and support staff, and longer lead times for manufacturing due to reduced factory capacity.
Warren added: “In association with CEDA we’re looking at whether we can try and pull the supply chain together to ensure payment terms.”
And on predictions for the operator market by respondents, he summarised: “They expect a reduction in capex and changes in menus to meet the new social distancing requirements in the kitchen.
“We should see some operators coming through with new trends – where there’s an opportunity there’s always somebody willing to fill that gap. But a lack of cash and a move to takeaway or dark kitchens will be important.”
Other panelists in Specifi’s ‘Ready for the Reinvention’ webinar on 24 June comprised Jack Sharkey, MD, Vision Commercial Kitchens; Scott Jones sales and key account director EMEA, True Manufacturing; Graham Kille, sales director, Rational UK; Nic Banner vice president sales UK and Ireland, Specifi and Bob Wolters, CEO, Specifi Global. More coverage from the event will follow.