Service Dealer enjoyed an informative video call with our dealer panel on Tuesday this week. It was helpful for us to catch up with retailers of garden, groundcare and agricultural machinery from around the country, to hear how they've coped during the first month of the year.

Following the discussion, Service Dealer owner Duncan Murray-Clarke, said, "For me, the clear stand out point on our dealer call was the supply chain and the real threat there is of stock issues. Speaking with manufacturers, these are down to a number of elements that they have little control over. I think that this might be the biggest challenge for dealers this year. Our next modules for the dealer toolkit focussing on diversification and protecting revenue is well timed and we will try to bring the launch forward.”

The wide-ranging conversation provided several areas of particular note.

Covid-security inspections

Firstly, following on from our story last week about GGM Groundcare receiving a surprise Covid heath and safety inspection from their local council, we heard that these appear to be occurring across the country right now. Several of our panel had experiences of these at their places of business during the past week or so.

All were unannounced, on the spot inspections. One even told us how the inspector actually turned up on a Saturday afternoon when the business was closed! This was then followed up by the council with a phone interview on the Monday. Another story we heard, one of the inspector's main causes for was concern that the hand sanitizer on site was at least 70% alcohol!

The message seems to be that there's nothing sinister about these visits, they are routine. As long as dealers are keeping up with the advice, there shouldn't be a problem. 

As there's not too many retail businesses open in any capacity at the moment, machinery dealers could well be in line for a visit if an inspector is making the rounds locally. Also, it was felt that there could be an element of local people ringing up the council to say that they've seen a store open when they weren't expecting to do so. If our own industry is confused over the lack of clarity of who is allowed to remain open and in what form, it's understandable that the general public would be too.

Stocking issues

As you might imagine, from situations I'm sure many of our readers have encountered within their own businesses, there was a topic which dominated our conversation this week - stock levels

There are problems with this for everyone it seems - and it applies to both parts and wholegoods. In terms of parts, it seems overnight deliveries cannot be relied upon, so making promises to customers is difficult. In terms of the ag dealers, farmers are spending at the moment, so it's imperative to satisfy that demand. Dealers who have stocked up on parts are finding this tactic paying off - even finding their local competitors who might not have built up their stores as much, are coming to them for supplies.

Farmers are also wanting to purchase wholegoods, but this is where a more worrying picture is emerging. The lead times for some tractors are stretching and stretching - we heard 40 weeks mentioned by one dealer. Again the concern is, if a dealer can't meet that local demand from what they have in stock, that customer is likely to move on to a competitor down the road. It felt like ag dealers were confident that business is out there, sales haven't stopped, it's just having the machinery to meet those expectations will become increasingly concerning.

We heard there were very similar problems for dealers of ATVs. Getting hold of any new vehicles is incredibly difficult and finding out when this might change is just as hard. We heard that some manufacturers were quoting their dealers to only expect 10% of the stock they would usually receive for the first six months of the year. Others were only letting dealers order to replace machines they they'd sold, not to hold as stock.

And the story was repeated on the groundscare side too. Certain chainsaws are apparently proving especially scarce at the moment. Shelves for some of these items had never been emptier we heard.

Again dealers told us they are working off of their winter stocking orders. However, these are of course finite supplies. Perhaps some dealers might have liked to have ordered in more machines at the end of last year - certainly their suppliers were trying to persuade them to do so - but the physical space available in many premises, is simply maxed out. As one dealer put it, "However much the manufacturers seem to think it is, my building isn't the TARDIS."

Similar to the ag dealers, groundscare dealers did not seem to have too many worries about the demand dropping off from their customer base any time soon. Of much greater concern is the ability of their suppliers to provide them with the machinery that they can sell on. Dealers are having to be realistic and manage the expectations of both their customers and their staff, as to what orders they can fulfil. 

Why is this happening?

As to why there are these delays across the board right now, well, there are a myriad of possible explanations. Is it Covid-related factory shutdowns in countries worldwide? The confusion caused by Brexit? The logistics crisis or shipping container prices? All of these reasons and more have been offered by suppliers.

Whatever the cause, it’s the end-user facing dealer who’s feeling the brunt of it right now. One of our panel summed it up, telling us "The pressure is mounting." It was felt that manufacturers could help their dealers by being as open as they could during this uncertain period. If suppliers could let dealers know more, it could help with planning and managing workshop flow.

The hope is that as we move throughout the year, business will find a way - as it usually does - and the bumps will begin to smooth out. The key is though, how long will it take for us to get to that stage? 

It seems likely that there will be different pinch-points for different sectors and different companies throughout the year. What will be important for dealers is how these are managed by their suppliers and what support they can offer their network during the periods of increased difficulties?

Trade shows

The panel also shared their thoughts on the trade show outlook for this year. Again, another confusing picture; shows are announcing and canceling on an almost weekly basis at the moment it seems.

We were told that some local shows that dealerships might usually exhibit at, haven't yet been in contact as would be expected. This could either be an admission that they are not happening this year, or merely that they are pushing it as late as they can before committing? 

Dealers on the whole wanted to support their local show but only when it's safe to do so and when there's sufficient appetite amongst visitors to attend. Also it seems fair to assume that some form of social distancing will be with us for a good while yet, so this would have an inevitable impact on how or if shows can run.

As we've mentioned before, other methods of keeping in touch with customers and the wider trade have been utilised this past year. Even if restrictions are lifted enough to allow trade shows to go ahead in some form this year, it seems that some might just me more comfortable sticking with those for another season.

In terms of visiting a large national show, there appeared to be so much uncertainty of how these could function this year, it felt too early to commit one way or another. 

I can't say I picked up on any burning desire by many to get back into an exhibition hall or field, any time soon.