Grouptyre to add Value through Service Initiative

In 14 months of Peter Harries’ leadership, Grouptyre – the UK’s leading independent tyre wholesaler – enjoyed sales growth in excess of 15 per cent. Attempting to continue this period of growth is Grouptyre’s new MD, Karl Naylor (see page XX) who has worked as the company’s director of commercial operations since 2005. He and the company remain committed to supporting manufacturers and meeting the needs of independent retailers, national account customers and franchised dealerships by improving service levels and adding value throughout the supply chain.

Grouptyre, with its network of 13 members in 33 UK locations (including Northern Ireland), is convinced of the key role it plays within the industry, presenting the wholesaler as “a buffer to smooth availability peaks and troughs.” Since manufacturers produce in batches and cannot afford to hold all products in stock at all times for on-demand orders, they require an intermediary to ease stock congestion. In addition, retailers have neither the space nor the financial muscle to carry all suppliers’ products for on-demand orders. However they do require a readily available supply of the tyres they do not stock, along with a fast and frequent delivery service, to secure consumer sales.

Since wholesalers support both manufacturers and retailers – by providing this buffer stock to ensure consistent availability and by delivering increased service levels so that retail outlets have access to the products they need to service their customers’ requirements – Grouptyre believes it has an increasingly important role to play, as long as they support the supply chain and their activities add value rather than increase the price consumers pay.

The company’s proactive approach to meeting the needs of its suppliers and customers is to establish supply chain partnerships. By working in three-way agreements it can help manufacturers achieve their brand strategies with retailers/consumers and this, in turn, helps to increase a brand’s market share and generate increased profit opportunities for retail outlets.

Partnership with manufacturers and retailers

Grouptyre is conscious that In the past, wholesalers had a reputation for seeing tyres as a commodity and were not interested in brands: they bought on the strength of the deals available, held large stocks of these items – on which they could make good profits – and only sold what they had in stock. Now a more subtle, nuanced outlook prevails: consolidation of the market has led to the growth of the dealership channel, the buy-out of independents or their development into chains and centralised purchasing by national accounts, while service level agreements are becoming more commonplace as customers demand consistency of service and competitive pricing.

In his days as director of commercial operations, Naylor said that, “We recognise that in today’s business environment a wholesaler must buy what its customers need to sell and hold wide stocks to cover the entire market, and that’s why we are working in partnership with manufacturers – to help them achieve their brand goals – and with retailers to help them meet their sales and operational targets.” Now he has the opportunity to carry this philosophy onwards at the head of the group.

National corporate identity

Grouptyre has in recent months updated its corporate identity as part of its evolution into a national brand (see T&A June 2008 page 48; tyrepress.com, ‘Grouptyre Rebrands as National Operation’). As the Grouptyre network carries over one million tyres – representing a value of £50m – the company is able to supply all the major brands plus several value and margin brands while also specialising in rare/slow moving niche products such as UHP and 4×4 tyres.

Grouptyre’s national, multiple same-day to on-demand delivery service involves a fleet of 350 vans leaving its distribution centres an average of three times a day, so retailers can be confident of satisfying their customers’ needs because they can obtain tyres they do not stock quickly and easily. The broad product portfolio and market leading delivery service combine with a competitive, market reflective pricing policy, which allows retailers to maximise profit margins while remaining competitive so that they can grow their businesses.

Adopting a self-applied “National strength, Local service” approach, Grouptyre offers a complete ‘one stop’ service delivered at the local level by its member companies. Each operates within a defined territory to cover the whole of the UK and combines the benefits of local market understanding with a dedicated, knowledgeable team to achieve success through high service levels. As a national supply chain partner Grouptyre has the benefit of centrally co-ordinated pricing and administration, a competitive pricing structure – thanks to its huge buying power – and consistent sales and marketing support activity.

“Wholesalers have become critical to tyre retailing operations – even those of the large national chains and prestige dealer networks – because of their ability to hold the width of stock needed to cover all eventualities and deliver the correct tyres on time, plus they are playing an increasingly important role in helping manufacturers develop and deliver their brand strategies,” adds Naylor.

“By improving service levels throughout our business and working in partnership with manufacturers and retailers we aim to add value within the supply chain which will benefit all of us in the long term by helping consumers make an informed choice.”

Supporting Tyre Safety Month

Grouptyre is a full member of TyreSafe, the not-for-profit, non-commercial organisation set up to raise awareness of the dangers of defective and worn tyres, and is throwing its weight behind this year’s Tyre Safety Month.

All Grouptyre member companies are promoting their involvement with the campaign, which puts the spotlight on the safety and economic issues associated with driving with incorrect tyre pressures. In addition to utilising the promotional materials available from TyreSafe, Grouptyre is raising awareness of the initiative and encouraging its customers to offer consumers free tyre safety checks – not only during Tyre Safety Month, but all year round. Free checks are available from those Grouptyre members operating retail outlets.

Pirelli promotion

Grouptyre’s two-month national summer promotion achieved its aim of boosting sales of Pirelli car, van and 4×4 tyres in the independent and garage sector, while one lucky tyre centre manager is on his way to an all-expenses paid trip to the World Rally Championships. The prize draw competition was open to all independent tyre retailers who purchased Pirelli tyres from their local Grouptyre member during July and August, and registered to enter via the company’s newly-refurbished web presence. The initiative resulted in a 10.7% increase in Pirelli sales by comparison with the previous average sales of participating dealers.

Aaron Bothamley, manager of Fairway Tyre and Auto Services in Rickmansworth, won the top prize and heads off to the WRC Rally of Spain on October 2. In addition to flights to Barcelona, all inclusive hotel accommodation plus access to the Pirelli and Ford technical areas, Aaron and his brother-in-law Paul were looking forward to taking a helicopter flight along one of the stages to experience top-class professional rally driving at its most exciting.

Aaron, who is supplied by the Grouptyre member Broadway Tyres, gasped, “I’m going to the World Rally Championships – I don’t think it’s quite sunk in yet, but I’m absolutely delighted. Although Paul and I are really interested in motorsport, neither of us has ever been to anything like this and we can’t wait to see what goes on behind the scenes.”

Runners-up Derek Campbell, proprietor of Derek Campbell Exhausts & Tyre Centre in Stockton on Tees, and Alan Gadsby, who owns AG Services, in Long Eaton, Nottinghamshire, won places at Pirelli-sponsored track days, while five fitters will be keeping extra warm this winter after taking delivery of new Pirelli rally jackets.

Derek, who is a customer of NE Wholesale, travelled to Knockhill Racing Circuit near Dunfermline on September 16, where he and his son Dez, 28, put a sporty Seat saloon and a single-seater racing car through their paces and tried their hand at karting and skid control. They especially enjoyed the karting and Smart Pursuit, Knockhill’s new high-adrenaline activity in which participants get behind the wheel of a roadster-coupe and compete on a mirror image track to set the fastest time.

“We had a brilliant time at Knockhill – in fact, Dez hasn’t stopped talking about it!” said Derek.

“The rain helped to make things a bit more exciting, especially the karting, but the atmosphere was relaxed and the team of instructors was excellent, making sure we enjoyed ourselves and got the most out of the experience. Thanks to Grouptyre and Pirelli for organising such a fantastic day, we were very impressed with the whole set up.”

Alan Gadsby from AG Services, who is a We Sell Tyres (Wholesale) customer, said, “Thanks to Grouptyre and Pirelli for this great initiative, which recognises we’re all working hard as part of a big team and is good for our industry. My sons, who are going on the track day, are thrilled because this is the chance of a lifetime for them. They really enjoy motorsport and now they’ll get to find out exactly what it’s like when they try out cars on the high speed circuit and skid pan and learn new skills such as adverse handling.”

The Pirelli promotion was the first of a series of national incentives and exclusive promotions that Grouptyre plans to develop in conjunction with premium brand manufacturers with a view to increasing its share of sales in the independent and garage retail sector.