PUBLISHER'S VIEWPOINT
January 2005
Dealers Change, But the Value of the Function Remains

Like you, I’m looking forward to reading Brian’s cover story on how foodservice equipment and supplies distribution is changing. (He’s working on it as I write.) Distribution has changed, without doubt.

Jan and I took the kids to Philadelphia over the Thanksgiving break. We stayed in a Holiday Inn at Fourth and Arch streets. I’d stayed there before, though I couldn’t remember when. A short walk reminded me. Just down Arch and around the corner on Second, I found a shrine to E&S distribution: the former headquarters of Harry Caplan’s National Products Co.

The site is still beautiful, with its huge National logo in 12-ft. high stainless and its four-square symbol against orange tile. Across the street, where Harry had two buildings filled with new and used inventory, were two huge holes. A big East Coast developer, Hovanian, plans a giant condominium project in this already gentrified neighborhood. They call the project “National City” and not only use the name of the Caplan family dealership, but the logo and the very four-square symbol. Since Harry once told me he owned 400 buildings in this part of Philadelphia (I never knew if that was a precise number), it’s a fitting tribute to someone who was a pillar of this industry for decades and FEDA president from 1963-67.

"The business is changing kid," Caplan told me in 1983.  "The chains control the real business now."

 But my point here is really that distribution and dealers do change. National, which was a Top 20 dealer in terms of volume and had one of the biggest showrooms in the business in ’83, is no longer in business. And Harry told me in ’83 why National would one day go out of business.

“The business is changing, kid,” he told me, more or less. (He talked like that, and I was a kid.) “These grocery and paper houses are changing everything. The chains control the real business now and either buy direct or do a national deal. And I’m sitting here with a showroom and $10 million in inventory.” See, National’s model was to have the customer come to Second Street. Oh, they’d run a truck to a contract job and had deals with the big hotels and restaurants in town. But it was essentially a cash-and-carry model.

Now we know from Restaurant Depot and Ace Mart that this model is still viable in some environments, but Harry was pretty much right. It’s not really the grocery houses so much that have won, as we thought then, but E&S dealerships that have the logistical sophistication of grocery houses. And the chains have changed everything.

But the functions performed by dealers always need to get done and are of great value to big chain and small independent alike. So I’ll bet there will always be dealers.

Cheers,

Robin Ashton
Publisher