German buying group MHK entered the UK market last year and is using this year’s kbb Birmingham show to shout about what it can offer independent kitchen specialists. Werner Heilos (pictured), vice-chairman of MHK Group, tells us more about its plans
Q: Why you are exhibiting?
A: We want to raise the awareness of what MHK Group can offer to independent kitchen retailers and suppliers operating in the UK market, and there is no better way to achieve this than face to face. We want to show independent retailers that they can compete with both large businesses and other companies selling directly to the end consumer if they join forces and pool their strength. As the UK kitchen market grows, both in terms of customer demands, product complexity and alternative ways to market, such as via the internet, we are convinced that the way forward is for retailers to improve their customer offer and competitive edge by becoming part of the MHK community. Together, we can help motivated business owners strengthen their proposition and offer customers a unique and competitive product range.
Q: What do you hope to achieve from the show?
A: Initially, we have to raise awareness and let people know about the advantages that being part of a buying group can offer, and then the benefits that MHK Group can offer over and above other buying groups. kbb Birmingham is the ideal platform to do this, and we hope this will lead to a raised level of awareness and enquiries from independent retailers and suppliers who want to find out how MHK Group can benefit them in their business.
We commenced operations in the UK in 2017 and have signed the first contracts already, so we already have a base to build from, and we have had many more interesting conversations that we are moving forwards with. We are convinced we are heading in the right direction to achieve our goal, which is to become the most successful and largest cooperative in the UK market by 2020.
Q: How’s business compared with last year?
A: Development over the past year is very positive in Germany, as well as in the other European markets in which our group operates. Last year alone, we were able to achieve double-digit growth in revenues in Europe. Currently, the specialist retail businesses are particularly successful in the market. They are growing at an above-average rate, in other words better than furniture stores and kitchen retailers. One reason for this is the fact that customer focus is again on quality, individual advice and comprehensive service. In addition, low interest rates have a positive impact on consumer spending. They contribute to a booming private residential construction market and investments in one’s own home.
Q: What are the main challenges facing your sector and how are you tackling them?
A: Despite the high demand, top three furniture retailers have a combined market share of 27.3%. MHK Group always tries to achieve synergies in order to support the specialist retail business. In addition, we support our members in the areas of sales, marketing and business management, and also in the context of succession planning.
Q: How might the UK’s leaving the EU affect your business in the UK?
A: I think that Brexit will present opportunities as well as challenges for retailers trading with Europe. Our feeling is that Brexit is a key reason to be part of MHK, as members will be able to overcome any challenges as a collective, with the strength of MHK Group behind it, pooling resources and knowledge. The alternative is for each retailer to face the challenges individually, with no shared knowledge, no shared awareness of others going through the same challenges, and most importantly without a clear voice. In times of uncertainty, I believe we can find strength in numbers.
The UK is a sizeable market with 66 million consumers, and demand for European goods, including German kitchen furniture, shows no sign of weakening. Low interest rates, high levels of home ownership and a strong market for property renovation mean this is a very important market for MHK, and a market we have great confidence in. We are very positive that even with the uncertainty surrounding Brexit, the outlook for independent kitchen retailers in the UK is good, and we hope to embrace this market with strong retail partners in the UK.
- MHK Group describes itself as the leading buying group for independent retailers across Europe. It is now expanding and offering the benefits of being part of the MHK Group to independent retail partners in the UK. MHK Group operates in eight countries and has a 38-year history. It has more than 2,600 partners across Europe with a combined revenue of more than €5 billion. Last year, it achieved double-digit growth in revenues across Europe. It says its members have leveraged the benefits of membership to maximise their profits, gaining the competitive advantage.