Swift Electrical Wholesale’s commercial director, Malcolm Scott, has predicted that franchise operations will dominate the UK kitchen market, with the number of kitchen franchise showrooms set to double within the next 10 years.
According to Scott, the “rapid” growth will be driven by a number of key brands already operating a successful franchise model in the UK.
The kbbreview columnist said: “I predict that Alno will have a ‘hard push’ with its in-toto brand, Schmidt will begin phase two of its UK growth plan, Mobalpa will continue to expand and Dream Doors and Granite Transformations will both continue to grow.
“Add to that Nobilia Kutchenhaus and several niche and upmarket franchise operators and you see the clear possibility for the UK market to follow the Euro model and become dominated by franchises.”
He added that the fact that the franchise model “makes it very simple for new, small business investors to enter the industry” while allowing big manufacturing groups to “quickly build up ‘tied shop’ dealer networks without the need for 100% investment in creating new showrooms” would be other factors behind the growth.
“Clearly, the owner would need some cash to invest in the franchise,” Scott said. “But, they wouldn’t necessarily have to have experience of working in a kitchen showroom, as they would have the backing of an organisation that understands the sector.
“For the tradesperson already in the kitchen sector, who might lack marketing expertise or commercial knowledge, the umbrella of a franchise network can provide the confidence to allow them to move from managing a fitting team to opening their own showroom. For someone from a builders merchant background, or a professional person from another sector of the home-improvement market such as a bathroom designer or a quantity surveyor, the guidance provided by a large group could provide a rapid entry opportunity to the kitchen sector.”
Scott said that while the growth in kitchen franchise showrooms would impact independent retailers, he believed it would have a bigger affect on multiple retailers.
“I don’t expect independent kitchen studios to vanish, as they offer a specific local service and a ‘more unique’ offering that some consumers will always prefer, however, there is likely to be a gradual erosion of their market share,” he explained. “The growth of franchise operations will, I believe, be at the expense of the fully-owned manufacturer showrooms like Magnet who will struggle to give an impression of local service and at the expense of B&Q and Homebase, who have struggled to develop their kitchen sales, and the likes of Jewson Group and Wolseley Group who have drifted ‘in and out’ of operating retail showrooms in selected locations for years, lacking any long term consistency.”
Responding to Scott’s comments about the growth of the franchise model in the UK and the affect it will have on existing businesses, Trevor Scott, owner of Rugby Fitted Kitchens, said: “Independents will continue to thrive, servicing higher-end clients who demand niche products that can only be made as virtual one-offs or are made from materials so exotic they are simply too expensive for the mass market.
“Lower down the food chain, where the volume is done, I can see manufacturers wanting to have much more control over their routes to market. We are already seeing this on the Continent, with groups of single-brand stores run either as franchises or wholly manufacturer-owned. This is now gaining momentum in the UK.”
Malcolm Scott will be speaking at the kbbreview Retail & Design Conference in the kbb Arena on Monday March 7 at 1400.