Wholesalers’ own brand offerings are getting too close to premium brand products in terms of features, running the risk of eroding manufacturers’ margins such that investment in innovation is threatened.
Mark Kelly, md of Intelligent Building Systems Novar EDS UK and Ireland, told the audience at the annual dinner of the Electrical Distributors’ Association that: “Price-led offerings in the electrical industry are moving too close to the premium brands in terms of features and therefore threaten the cash contribution of all concerned.”

Eroded margins are stifling the ability of Novar, whose brands include MK, Bardic, Gent and Ackermann, to invest in innovation. “We believe that there is a strong onus on us to continually innovate our product and service offerings to ensure that we meet the perceptions of customer value, value for which they are prepared to pay a premium price,” said Kelly.

“It is getting more difficult to innovate, particularly when there are so many fast followers out there, guys ready to copy our ideas and designs without making the initial investments, who then undermine prices within the market with a similar offering. We embrace the challenge of keeping our products ahead of the competition, but we are concerned that channels are supporting price-led offerings that are too close to the premium brands,” said Kelly.

Source

Electrical and Mechanical Contractor