idverde’s Head of Assets and Fleet, Angus Lindsay, explores whether dealers are acquiring small businesses to broaden their offering and the impact this could have on the industry.
Following the LAMMA and BIGGA shows earlier this year (which now seem a very long time ago and look unlikely to be replicated again until at least the middle of 2021) I penned an article entitled “Globalisation” which looked at the move by manufacturers to acquire smaller niche businesses in a move to increase the range of products they can offer under one badge. It now seems that a similar situation is occurring with some dealer networks in the UK.
With a number of the larger dealer groups and manufacturer-led businesses looking to expand their territory or change the way they operate, we have seen a number of businesses taking over or amalgamating with their competitors where businesses maybe don’t have a succession plan in place or are looking to call it a day and join forces with their rivals. Whatever the reason, there does seem to be a move by some of the big name dealers to increase their footprint across the country. In particular John Deere, New Holland, and Kubota are expanding their networks and establishing what can only be described one-stop “Super Dealers”.
So, what’s the effect on our industry? Hopefully very little, as these larger dealers will continue to support the landscaping, amenity, and sports sectors as they are valuable components of their business; and whilst agriculture is undoubtedly their main focus, they need a variety of business sectors to complement their range of products and market exposure. However, it could mean that the range of competitor products currently offered could reduce as their main franchise takes on other manufacturers and starts to dictate what they can and cannot supply, especially where there is a clash of product types.
The recent decision by Honda to cut its dealer network by a quarter could be seen as an inevitability as they look to streamline their business. You could blame the pandemic situation, or was it always on the cards? Who knows? I wonder how many other manufacturers supplying similar type products will look to follow suit. Will we end up like the food sector, where half a dozen main players dominate the sector, with the small supermarkets and corner shops satisfying the local requirements?
There are many small businesses out there who, through hard work, have forged their way forward to establish themselves as reliable and competitive service providers, and they are now picking up some of the franchises being dropped by the larger dealers. Ironically, many of these outfits were started by ex-employees of larger franchise operations and have focussed on giving a cost-effective, no-nonsense and reactive service which better suits their customers’ requirements.
It may sound like I am having a dig at the larger dealer network, but this is far from the case; these operations are key in supplying parts and service during seasonal pressures and difficult times, and many have done so admirably over the last few months. The point of this article is to highlight the changes, which I’m sure we have all seen as we adjust to a new way of living and working, and what this could mean to the future of our industry, as these changes will affect many different sectors; not just who supplies the parts and changes the oil, but who operates the equipment, creates the landscape and delivers the service.
Angus’s article is also published in the December 2020 issue of Pro Landscaper magazine.