The chairman of buying group CIH (Euronics) has urged manufacturers to recognise their place in the market when it comes to positioning their brands.
Speaking at the CIH suppliers lunch yesterday at the Dorchester hotel in London, Robin Millwood (pictured) said that in an ultra-competitive market, suppliers need to look more closely at where they place their brands – entry, middle or premium.
“Not that long ago, there were distinct boundaries where suppliers saw themselves – as did the public – and these were very simple,” said Mr Millwood.
“Entry level – value for money with a mixture of known and lesser-known brands with few frills; middle level – the mainstay of the UK market, where you had all of the traditional brands with solid products offering pretty good specs; and top level – premium brands and sometimes middle brands aspiring to be premium, which did not really work.
Added Mr Millwood: “However, about 12 months ago there was a total change where, all of a sudden, you had certain brands now wanting to dominate both the entry and middle level and all this did was to force all the other suppliers to follow suit. And guess what? The only ones to gain were the public, who got even lower prices, and one or two suppliers, whose volumes increased and then they could not supply on a regular basis.
“We are one of the few industries where we were selling a mid-range washing machine 10 years ago at £300 to £320 and that same spec machine today is £220 to £240, or even cheaper.”
Said Mr Millwood: “While all this has been going on, the demands of the suppliers for us bricks-and-mortar dealers is to have ever more on display, albeit with very advantageous discounts, just so the public can come and touch and feel them and then go and order them on the internet.
“This is still not an even playing field and to survive we need the manufacturers’ help. We can offer the expertise and skills in displaying, selling, installing and after care, but to do this we have to make a workable profit margin, which has become ever more difficult.”
Mr Millwood said that the leading brands should realise where their market placing should be and then the rest of the market would follow them upwards.
CIH (Euronics) also used this year’s suppliers lunch to announce two awards. The winner of the Supporter of the Independent award was BSH, while the trophy for the Euronics Supplier of the Year went to the Electrolux Group.