the BIG interview
“We’re kind of a local business,” Jonathan suggests. “We’re not corporate. We’re down to earth as an organisation, with a customer focus. We’re also very focused on the UK market, although our international business has grown. And while we do business internationally, ultimately, we’re a UK manufacturer; there is nobody that manufacturers the range that we do in the UK. We’re the only manufacturer of built-in ovens and hobs in the UK, and we’re the only freestanding cooker manufacturer left in the UK.” For the domestic market, it’s something that Jonathan thinks consumers are behind. “If it comes down to a choice between two products that the consumer is equally interested in, that can be a differentiator for us,” he says. It has also been a boon in the international
market, Jonathan adds. “In 2012 we were very proud to be awarded the Queen’s Award for International Trade,” he says. “Even as recently as seven or eight years ago, we weren’t focused internationally. Now we have an international sales division within GDHA and we’ve grown our international business significantly; it’s now nearly 10% of our total sales. It was a proud achievement for us, and it’s been a continual focus to develop that business. “When we go out to IFA in Berlin, you see
the interest for British manufactured and British engineered products. Whereas before we weren’t exporting to any countries, we now trade in France, Holland, Belgium, Germany, Poland, Sweden, Singapore, Malaysia, Australia and New Zealand. There’s more for us to do, but if you
look back to where we were six or seven years ago, that’s been a big change and has allowed us to broaden our business in terms of territories and markets. That’s a key part of developing the business for the future.”
A market of opportunities Looking at the wider industry, there have been plenty of positives for the domestic appliance categories. “The economy has been very buoyant,” Jonathan says. “We’ve come out of three or four years of declining markets, and the last two years have been growing again. We’ve seen low interest rates, increases in wages and disposable income, and we’ve seen the housing market pick up, which is always a strong growth area for domestic appliances. So the macro level of the market has been very buoyant and everybody’s enjoyed that.” The market has not been without its challenges, of course. “Although volume has increased we’ve seen intense pressure on price,” Jonathan continues. “We’ve seen probably, in my experience, the most significant deflation in the market we’ve seen in 20 years. There’s been a lot of competition in the market, part of that through currency valuations, but also with aggressive pricing.” With excessive focus on price, other issues
are raised. “The challenge for us as an industry is that
there has become a bigger backdrop across the market with issues about quality,” Jonathan explains. “We need to be careful as an industry;
there is a need to remain competitive, of course there is, and that helps encourage consumers to replace products, but we also need to safeguard the quality of the products. We’ve got to be conscious of giving consumers good quality and good value at the same time. “It’s easier to trade a consumer down and more difficult to trade them up,” he adds. “So while we live with the market day in, day out, and we know it inside out, the consumer is popping into our marketplace once a year or once every two or three years to buy a product. So their perception of value is totally different. What we have to try and do, is when these consumers come into the market is to try and trade them up, not trade them down. It’s an easy thing for us to slip into, with Black Friday deals and driving prices down. I’m not always convinced consumers want cheaper prices. Consumers are looking for good value, but that doesn’t necessarily mean cheap.” New product development and innovation is
key to keeping value in products, Jonathan adds. “That really presents a great opportunity for the industry,” he says. “It’s a very big market, and consumers ultimately want domestic appliances. They aspire to own high value products that add specification and benefits, so there are lots of opportunities to grow and really give consumers what they want. It’s a very good market with lots of opportunities to trade consumers up and add value.” There are plenty of retailers in the industry
who have earned Jonathan’s admiration, given difficult trading conditions over recent years. “I think everybody does a good job, because if they didn’t they wouldn’t be in business,” he explains. “We could sit down for half an hour and still not name all the people, all the retailers, all the brands that have gone out of business over the past 25 years. I’ve got a lot of admiration for all the people in the market, because the reality is it’s not easy to extract value from it.” He continues: “If you go back over the
years, you’ve got the growth of online and the digitalisation of the market, but the reality is that in MDA the independent sector has had and still has a very strong share of the market. It shows that where we’ve got good retailers that add value, and modernise and change, they’re still successful businesses. The pace of change in consumers’ expectations has accelerated a lot. The need for businesses to continue to evolve and change has become more and more demanding. You can’t just sit on your laurels and expect the market to come to you.” It is also important for manufacturers
Offering high value, aspirational products allows retailers to trade up consumers in store while providing a premium experience
July/August 2016
to move with the market. “Listen to your customers and never get complacent,” Jonathan advises. “If you’re a mass market retailer or a mass market manufacturer, there is no room now for taking your foot off the gas. You’ve got to be really focused on what you’re doing and what you need to do. There’s no time for a let up, because you won’t be relevant. “There’s no easy money,” he adds.
“Everything is hard fought and hard won.”
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