A Report by Peter Brett
Regular readers of ToolBusiness and Hire will know that Thomas Graham and Sons graced our pages a little over a year ago. But in business, as in politics, a year is a long time, and having won THS Member of the Year in 2010, it was thought that another report was in order. After all, slow growth and a change of government, with all that we now know entails, makes for a somewhat different scenario.
Thomas Graham and Sons is based in Carlisle, not in the heart of any traditionally established industrial area, and yet became well known as a steel stockholder. The saying in the Carlisle area goes that if Thomas Graham don’t have it, then no-one will. An enviable state of affairs. For a long time the shop attached to the steel stockyard sold tools, fittings and engineers’ supplies and was run as a sort of convenience to the steel customers.
However, about fifteen years ago, the directors at Thomas Graham decided that the shop had to be profitable in its own right. A very brave decision, and yet one which we would all agree is commercially sound. The decision once taken, nevertheless resulted in a very hefty product changing exercise. All this takes time, argument and persuasion as anyone who has watched Mary Portas will know. In her “Queen of Shops” programme on the BBC I watch with agony as shop owners who “Know their Business” are forced to face current retail reality.
Yes, the range of pots and pans had to go, and perhaps even reluctantly, the horseshoes and not a few other products that sold, but not in sufficient amounts to justify their storage cost, and to create space for the new incoming products.
Grahams still stock over 30,000 items in their “cavernous warehouse” despite the clearout. Generally the aim is to have a range of goods from hand tools, fasteners, the now omnipresent safety wear and janitorial supplies. This conforms to the current orthodoxy of independents trying to be a one-stop-shop, competing with the “sheds” on stock availability and price, but with levels of service and expertise that the “sheds” can only dream about.
By using computer stocking software that can help monitor sales and margins, when new product items are suggested, it is very quickly possible to gauge how economic they are. For example, Roger Smith, Managing Director, is actively considering a new range of welding products. Welding would seem to be a natural partner to the steel business, but with the availability of new ranges of innovative welding products at highly competitive prices, now would be a good time to act.
Roger also stresses the importance of service as a difference between Grahams and the “sheds”. They will try to source anything within reason, for a customer, as he says, “anything from a calculator to the hire of a Chinook.”
While stock control by computer is a no-brainer for most companies these days, deciding what stock to have is much more to do with judgement and “feel” for the customers and their needs. Grahams stock well-established names like Makita, Stanley and Dickies because there are considerable advantages in terms of knowing that selling quality products generally means fewer returns and a lot less hassle. But Grahams knows that retail business doesn’t stand still, and regularly picks the brains of its sales and purchasing teams to learn about new products and lines. Some of this information comes from customers, some from other traders, and some from press and television and trade shows – and yes, even from the pages of ToolBusiness!
By focusing on major product groups each year the company tries to refresh and refine the product offer so that it remains up-to-date and competitive. Last year Grahams looked at safety wear, this year was the turn of power tools and welding. It seems like such a logical and sensible thing to do in any business, but as we know time, and just the business of business often come between what we do and what we ought to do – but the lesson is clear.
Managing links between the main branch at Carlisle and the branches at Egremont, Kendal and Morecambe is another key factor in delivering service to customers. Computers, internet and telephones are vital for managing this but crucially, vans aim to be at branches by 7 am so that next day delivery of most items is possible. Gone are the days of waiting, customers demand next day delivery at the latest and Roger says that it is a key competitive factor in their business that serves Cumbria, South West Scotland and North Lancashire.
Roger wryly notes that a national competitor has moved into the area and another is expected soon and he therefore expects some changes. But he also notes that being competitive is really based on fault finding in your own company and then improving on areas highlighted. He is confident that Grahams offers good service and flexibility, and when combined with a highly trained and experienced workforce is a winning formula. With 5 members of the sales team having over 30 years experience each in the field, their advice is much appreciated by customers.
Further development of the sales teams is vital, in Roger’s view, for developing the business. This not only includes internal training on the business and its methods, but external product training from suppliers, study up to ILM level 5 for managers and teams taking responsibility for major clients. I think we would acknowledge that this is a great way to value people as well as sound business sense.
Being a member of the THS Group confers many benefits on Grahams. These include the simple cameraderie of being able to swap ideas and experiences with people in the industry, formally and informally, as well as being able to attend the THS Show each year. In Roger’s view this is the best show in the industry by far, not only because of the new products on show, but also because of the deals and terms available that enable businesses to plan stocking decisions for the future. Not forgetting the competitive pricing that the THS Group can gain for its members.
Special offers are another area in which THS membership helps. THS puts together bespoke offers for its members every quarter and these do work. Last year when THS put a table tennis table, a pool table and a table football on the flyer, Thomas Graham was surprised by how many were sold, including exporting one of each to a customer in Iran.
Thomas Graham does its own regular special offers, trying to focus on a different group of products each time, but it is a time consuming business, and is therefore keen on the THS system.
With his crystal ball in front of him and his “political” hat on Roger acknowledges that the last few years have been tough. But, Thomas Graham has met its targets – no-one was made redundant and the company made a profit. However 2010 is bringing further challenges – not least the round of spending cuts that are inevitably going to affect the construction industry. With characteristic vision, Roger is hopeful that the planned development of a new nuclear reactor in Cumbria will provide a new source of business. As Amec’s Supplier of the Year a little while back, Thomas Grahams has the necessary connections, based on continued good service and product knowledge, to hopefully ensure its survival and possibly even prospering during tough years ahead.
Since Roger’s great, great grandfather started the business in 1892 the world has changed hugely and the company has survived by meeting all the challenges it has faced. Roger is convinced that the “best team he has ever had” in the business will ensure that it will still be going in 2092.