Foodservice Equipment Reports

Your Friends Are Worried About You

I’ve been making speeches the past couple weeks, doing forecast overviews for MAFSI’s member meeting in Palm Springs, Calif., and for Southern California Edison and Pacific Gas & Electric. I want to mention that at every single stop, someone asked about how the Internet was affecting dealers. Seems a lot of your friends are worried about you.

I don’t have a simple answer to this question. The impact of the web and electronic media generally on how foodservice equipment and supplies gets specified and purchased is complex and emerging. I’ve argued that in many ways, the use of online catalogs and systems by dealers, either as pure plays or as extensions of bricks and mortar dealers, are a throw-back. The catalog model has been around for almost a century in E&S, with companies such as Superior Products (now Next Day Gourmet, part of U.S. Foodservice), Boxer Marcus and others becoming major players. And it all goes back as far as the 1870s with Sears Roebuck & Co. and Montgomery Ward.

I’ve also long been skeptical about whether operators feel comfortable trying to configure and spec very complex equipment online. Buying ladles or sauce pans or cutlery is one thing. Trying to figure out a fryer or a combi or even a two-door reach-in that is right for a particular operation is something else.

What the Internet does add to the mix is the ability to almost instantly compare prices. Several of those who brought up the issue worry that operators will rely on dealers to help them spec the product, then go shop it around on the Internet. We all know this happens. We also know that younger folks are used to buying online and that the shift is just a matter of time.

But there are impediments and structural issues to a rapid migration to online E&S buying and specifying. The growing multiunit nature of foodservice in North America is a key roadblock. The big chains and foodservice management players exercise tremendous influence on the E&S products in their systems, as do consultants in the noncommercial segments. They control their specs and the sources of supply. Whether an individual operator in their systems picks up a phone or turns on the computer is almost irrelevant.

Manufacturers have almost instituted “Minimum Advertised Pricing” and “Minimum Sales Pricing” regimes that are specifically designed to level the playing field for all re-sellers. Believe me, most manufacturers want to protect their best dealer partners.

I’m afraid we’ll just have to see how this all plays out. But to be honest, I’d bet on the existing players.

Cheers,

 

Robin Ashton

Publisher

rashton@fermag.com

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