Buying groups were out in force and vying for new customers at the kbb show in Birmingham. Der Kreis (KBBG), MHK and the Sirius Buying Group were open for business.
Speaking to kbbreview on the Der Kreis stand Bill Miller, MD of the Kitchen Bathroom Buying Group (KBBG), which is part of the Der Kreis Group, said: “Membership is growing and we have invested in recruitment. From January we have had a new salesperson join our team and that takes us to three field sales people. We see that growth in membership continuing – we are growing at the rate of around one new member a week. My goal from day one has always been 500 members and I see no reason why we shouldn’t achieve that over the next couple of years, and I think we may bring in another 100 members this year.”
And visitors to the stand are more aware of Der Kreis, according to Miller: “ It has been very heartening at the show so far to see the number of people coming on the stand that have some recognition of us – before that wasn’t the case.”
Acknowledging that competition is hotting up in terms of UK buying groups, Miller added: “In two years’ time, I wouldn’t be surprised to see five or six buying groups. We have something different to offer, because I think if we were all offering the same that would offer no choice for retailers. The message is getting out there that being a member of a buying group does give many advantages whether you have been trading 30 years or 30 minutes.”
Miller pointed out that the weakness of the average independent in the UK is their average turnover of around £500,000. By joining the group, the leverage and the voice that gives them can far outweigh the size of the business. And then there are the networking opportunities. A lot of our members really enjoy the ability to meet with fellow, like-minded retailers.”
Miller told kbbreview that although it has nine kitchen brands, mainly German kitchens brands, it has added a new brand, Alku, to JJO. But Miller added that he’d like a balanced mix of brands, maybe adding some Italian options. He also added that the group was seriously looking at adding a bathroom offering, but that that was “probably 18 months to two years away”.
He also added that one of the USPs Der Kreis can offer is consumer credit through Hitachi Retracare, to which he said that “the response has been fantastic”.
On the MHK stand, kbbreview spoke to sales director Paul Wheeler, who was very upbeat about progress in the UK.
He said: “It’s been going really well for us in the UK. We have had a great show. We were here two years ago and that worked well. For the first time this year we have a kitchen on the stand, a British one, just to show that we are supporting British brands too, in this case Manor Interiors. We are also working with GDHA.
“Our membership grew substantially last year and also in terms of the business each member was doing with us. We more than doubled our turnover last year.
Going forward, we just want to grow in line with the market and establish a secure financial footing. It’s not just about the number of members, but quality of members. I’d rather bring in one good customer than 10 poor ones.
One of the unique benefits MHK offers, said Wheeler, is its centralised payment solution. Our retail members get an open-ended credit limit and can pay 30 days after delivery and if they want to ramp up their business they can do so without bumping up against credit ceilings from suppliers. We also offer suppliers a 100% payment guarantee. It offers a risk-free way to grow for suppliers. And I think that’s unique to us.”
He also pointed out that its members will retain their independence, while enjoying a “guaranteed minimum of 1% of their turnover. And that can increase a typical showroom’s profitability by 8.5%”.
Over on the Sirius Buying Group stand, kbbreview caught up with commercial director Steve Jones, who had a confession to make.
“We were here two years ago as a kitchen buying group,” he recalled, “but we soon realised we were taking a completely wrong approach. We assessed the needs of the market and so we are here offering appliances mainly, but we do have a close working relationship with Symphony Kitchens. And that’s where we are starting to make some good inroads with kitchen studios. What we believe we can strongly offers is appliances. We find that many retailers can’t be bothered with appliances just to make 10-15% margin. But appliances are our bread and butter, we’ve been doing it for 20 years and we have great links with all of our suppliers.
“With our buying power and the rebates we can offer, it makes appliances a more attractive proposition. All of our top-name suppliers have told us here today that they do want to support the kitchens channel. We don’t interfere with the structure of our members’ businesses.
“We have had a fantastic reaction from retailers at the show. We have signed up a couple of retailers today, which I wasn’t expecting to do. They get what we can offer. We have 171 members in total with 250 stores. Of that 35 are kitchen studios but we are selective about who we take on. Quality not quantity.
“We can offer purchasing power well in excess of £100 million.”
And he has ambitious plans. He told kbbreview: “We would like to triple our kitchen studio membership over the next 18 months. That sounds ambitious, but we can do it. But I think we have an education process to go through with retailers. We don’t want to tell them how to run their businesses, we want to get better value for them.”