Leading KBB industry figures have rejected claims from Bill Miller, managing director of The Kitchen and Bathroom Buying Group (KBBG) that mass-market distributors will eventually be replaced by buying groups in the UK.
Speaking to kbbreview at the LivingKitchen show in Cologne in January, Miller said the rising influence of German buying groups like KBBG parent company Der Kreis and MHK in the UK was the result of a weakening in the distribution model.
Writing in the March issue of kbbreview, Swift Electrical Wholesale’s commercial director Malcolm Scott said that Miller had reached a “wild conclusion” based on little evidence, while Derek Miller, co-owner of Scope Bathrooms in Glasgow, said that the UK will always support a core of solid distribution companies who can “roll with the blows”.
Responding, Bill Miller said: “It is always good to keep the debate going on buying groups, in the interest of the industry, so more independent kitchen and bathroom specialists have a greater opportunity to read and understand the benefits.
“The benefits of both buying groups and distributors bring the specialist the opportunity to purchase from a choice of sources, and from whom they wish. It is true that some buying groups put restrictions on trading, but the KBBG doesn’t.
“I ask UK studios, in a tough market, where retailers are fighting to survive, why don’t you give me an hour to explain our offering?”
Marcel Krezee, managing director, MHK UK, LivingKitchen, Cologne
“The KBBG offers a win, win solution and one that shouldn’t be overlooked. The rapid progress the KBBG has made in the UK, since its launch only a few years ago, clearly demonstrates that there is both an opportunity and need that many independent kitchen and bathroom specialists welcome.”
Scott, a substantial supplier to, and a great supporter of, the Sirius Buying Group, said: “Distributors offer a quite specific service that is very different from what buying groups offer.
“Distributors offer factory owners who do not have warehouses or transport fleets in the UK a method of delivering to retailers.
“Joint stockholding across kitchen channel distributors, such as Swift, PJH, O’Neills, Leaker, JPD, Sinks and Things, KTS, Blackheath, KA, Gardiner, PWS, Häfele, TKC, MAK, Plasman, IDS, LDL and THD, will certainly be over £50 million, with a joint fleet of about 200 trucks, plus warehousing of well over one million square feet.
“This does not include the companies that Bill identified as changing from distributors to manufacturers who do their own distribution.
“I have heard no evidence that these ‘newly-arrived’ European buying groups will perform this kind of a role.”
Meanwhile, Derek Miller added: “I have never met Bill Miller and know nothing of KBBG or Der Kreis, so cannot comment specifically about their qualities or business model.
“What I do know, however, is that buying groups have been a feature of our industry for decades. The concept is really nothing new. I have also dealt with KBB distributors for 20 years and, for the life of me, can’t really see how they can be replaced by buying groups.
“It is not only distributors that have bitten the dust over that period. Some buying groups have also disappeared from the scene. They are certainly not immune from a loss of influence.
“Our industry has undoubtedly changed dramatically over the past two decades. We have witnessed the emergence of a whole raft of suppliers who manufacture nothing, and who act as mini-distributors of their own ranges, often sourced from the Far East. We have also seen more manufacturers showing a willingness to sell directly to retailers over the same period.
“On the back of these changes, the number of traditional distributors has undoubtedly thinned out, however there remains a core of very good and very solid distribution companies, both at national and regional level. These are well-run firms who can roll with the blows and bounce back from most setbacks.”
- Read more about what Derek Miller and Malcolm Scott had to say about buying groups in the March issue of kbbreview, out soon.