With distributors increasingly taking on projects and maintenance across the UK, what kind of impact is this having on the catering equipment supply chain, and is local or national coverage more beneficial?
One man who knows his way round both large and small dealer set-ups is Advance Group chairman, Steve Coates. Today the Dunstable-based distributor carries out around 100 projects and 30,000 service calls every year, particularly for national chains, but when Coates started the firm in 1981 he was the archetypal ‘man in a van’, mainly carrying out work in central London.
He recalled: “It did not take me long to identify who the larger dealers were at that time. I looked at them and they provided me with the motivation to build Advance so we could compete with them on an equal footing.
“I think it is very important that this business meritocracy continues, as it provides great opportunities for well run businesses to grow and become the next generation of larger service providers.”
In terms of company size, he detailed: “Scale has nothing to do with it, it’s all about the level of customer service you provide. If you over-extend yourself the lessons of poor service execution are soon learnt, and you have to adapt to what you are resourced to carry out and capable of providing.”
He concluded: “I think that sums up our industry really. You can start as a one man band and over time with the right stewardship grow your business to compete with the biggest in the industry if that’s what you aspire to. Equally there is a market for companies of all shapes and sizes.”
At Sheerness-based Kent Catering Service (KCS), MD Tony Irwin is of the opinion that it is more advantageous for operators to use local rather than national dealers. “Speaking from experience we believe local dealers are more accommodating to the customer’s requirements and needs,” he said. “The local approach of building customer relationships is lost on national companies; knowing your customers, their equipment and needs is a fundamental must in business.”
Furthermore, he feels that it is more environmentally friendly for distributors and service companies to specialise in their own regions. “We hear stories of engineers travelling hundreds of miles out of their area to attend calls, usually first to fulfil their own KPIs for attendance. By working local we reduce our emissions and carbon footprint.
“Whilst we understand the need for a dedicated one stop call centre, the logistics don’t work with fixed pricing. Thinking about the cost of fuel and wages and without a doubt the environmental issues, it seems outrageous that all national companies should not be looking at the possibility of utilising more local companies. KCS would be more than happy to work alongside any national company and would treat their customers as we do our own.”
Irwin summed up: “Unfortunately we can see dealers winning more projects outside their local area. As distributors chase for business, more and more work is being tendered outside of catchment areas in the quest for lower prices.”
At the other end of the country, directors of Blackpool-headquartered CKS, Diane Moden and Dawn Cheetham, agree with these sentiments. “There has been a drift to nationalising over the years, but the evidence is that this isn’t always what the client wants, or what ultimately works,” they commented. “With a national company there is a loss of the personal touch, less ‘ownership’ and less ability to react.
“As a local dealer we have clearly operated a business on a model that suits our target client base, so naturally we will support the concept of local being best. We offer a professional service to our clients mainly based in the North West of England.”
However, Moden and Cheetham do acknowledge that there are economies of scale that could be applied in running a national business, predominantly on the non-income-generating functions such as payroll and HR. They added: “However we all know how frustrating it is to deal with centralised business – no continuity, rarely able to speak to the person who knows you and your site, and a far greater staff transience which results in a lesser amount of customer and product knowledge.
“On the other hand when a local business is under pressure then resources are stretched and response times affected. However, we believe a smaller/local business is more easily able to prioritise and ‘think smart’.”
They detailed that the times they do travel outside the North West for projects they manage these schemes differently. “Scheduling deliveries to site, engineers staying over and service support in the locality can be environmentally sound and more cost effective.”
Moden and Cheetham analysed: “Competition is strong and the larger dealers are able to cost out on smaller margins. What they can’t or don’t always want to do is support their installations.”
In neighbouring Cumbria, Lakes Catering Maintenance’s MD Leigh Howard can see the pros and cons of both local and national dealers, but as a local firm himself he believes that local dealers invest in businesses and people in their area. “They build long term relationships, supporting and contributing to each other’s successes. Customer care and the longevity of a relationship is key for the local dealer and as such the operator gets great value and service.
“The reputation of such relationships is often contagious. We find one satisfied local customer will always lead to new business and new enquiries just on the effective and responsive care which is taken before, during and after any installation.”
He reported: “The feedback from clients who have dealt with a national provider is although they may have more recourse to turn a project around quickly, they are not necessarily in the right location to support before and after sales, which is key to returning a project on budget, and key to a smooth service once the handover has taken place.”
In terms of green implications, he detailed: “I can think of a typical project which I have been involved recently with has easily lead to at least 15 site visits. Being local I can call in when passing or be there within half an hour or so. Clearly the carbon footprint of travelling excessive hours would not have a desirable effect on the environment. Technology plays a part in reducing this footprint, but multiple contractors and physical issues are yet to be resolved in any other way than getting on site to problem-solve as a team.”
In the North East, GastroNorth director Tim Whitfield has a pragmatic view on the dealer project landscape. “We are experiencing more local competition from dealers outside of
our area but we have also increased the level of business we are doing outside of our area, so we can’t complain about those dealers trying to win business on our patch.
“However, winning business is sometimes the easy bit and we have experienced dealers who have been unable to support the projects they have secured in our area, and we have picked up the pieces. So whilst it’s fair competition, it’s also a case of buyer beware.”
He acknowledged: “National operators will generally have a robust delivery strategy which demands a certain level of infrastructure and resource from the dealer to support their projects, based on the volume of work offered. This may not be suited to a smaller local dealer but on the flip side, a local independent operator is more likely to receive a higher level of service from a local dealer, where the project deliverables are less structured and the project requires a more involved and personal approach.
“Nine times out of 10 it will always be more environmentally friendly for a local company to take on a local project but many national companies have representation outside of their area which can help reduce the time spent travelling to and from site.”
For Hatherley Commercial Services, Kirstin Hatherley explained: “As a national dealer we will always have a team of engineers within the customer’s area, meaning that we will be more effective on response times. I think it more advantageous for operators to use local companies as we are never far away and more cost effective too.
“In order to operate successfully nationwide, you need to employ a team of engineers strategically placed around the country or use a network of sub-contractors.”
However, the Newark-based distributor itself has now decided to stick to its own area, because as Hatherley detailed: “We have had a situation before where we took on a project 200 miles away. When it came to snagging, an engineer needed to travel 3.5 hours to carry out a 5 minute job! Travelling long distances is costly and not environmentally friendly; when taking on a project at some distance you are not on hand to deal with the simple things.”
She concluded: “There will always be companies branching outside of their region, but I think there is enough work out there for everybody. It’s up to us to keep our own customers happy and therefore hopefully loyal. Ideally dealers working within our area will use a team of installers like ourselves locally which would be kinder to the environment.”
As a London-centric dealer, Chiller Box has a thriving local market: “I would say local is best but it’s really about a client getting the service,” said MD Marios Poumpouris. “As long as the service is there it doesn’t really matter where the dealer is located.
“A local dealer should generally be better placed to be available and give better response times than a national dealer, but again it’s about the organisational set up and resources of any dealer to give the service to their clients, wherever they are.”
He considered: “We all live in a very cut-throat and commercial world and so have to go where the smart money is, wherever it may be. We’ve delivered kitchen design and supply of equipment for an Ibis Hotel in Lagos, Nigeria before, so we don’t mind as long as we can make a couple of quid!
“Saying that we do sometimes turn work down outside our patch, particularly if we don’t think we can give the service, or are too busy with existing workload – often in these circumstances we will recommend one of our CEDA colleagues who may be better placed geographically.”
Likewise, large independently owned distributor C&C Catering Equipment is circumspect about today’s dealer market. According to MD, Peter Kitchin: “It’s the same for distributors all over the country – people work both locally and nationally. That’s how it’s always been and that’s how it will probably be in the future.
“We have PMs who are based in London for that work, and also PMs based in the North West who do the local work. People work over here from Northern Ireland and people from South Wales are doing work in London.”
He concluded: “The utopia would be to just work locally, but everyone must go where the work is. When clients want us or A N other to do their work, we must do it.”