Voices
Paul Cubbage, MD, Target Components
In terms of 2009, I think we're in for much more of the same. We will undoubtedly see some significant fallout in the sector by the end of Q1 and throughout Q2. This will primarily be amongst major high street names and at distributor level for those disties that rely heavily on these businesses for a significant proportion of their revenue.
Other than those directly affected, and apart from the impact on job losses, there will be few tears shed in the wider channel. The bigger retailers have for years driven down prices and gobbled up the market at the expense of smaller traders.
Many have shown arrogance towards both suppliers and customers over the years that there will be no shortage of people prepared to give them a kicking on the way down. In many respects, it is simply a case of chickens coming home to roost if they now find themselves without the business model, flexibility or customer loyalty to cope with a change in demand patterns.
We have the luxury at Target that we have always had a broad customer base across the whole channel and are not reliant on a small number of key accounts. We also have a customer base that is mostly thriving under current conditions because they are based on quality of service and they are sufficiently flexible to adapt their businesses to new opportunities.
We will continue to develop and improve our service to them as we have over the past 10 years, and in return we enjoy a fantastic level of loyalty and support from them.
There will also be plenty of opportunities for acquisition, and we are ideally placed should the right businesses become available in 2009 provided that we believe that the price is right, that we can improve the business and that it allows us to further enhance our offering to our customers.
I said last year that 2008 would be an interesting year, but as 2009 approaches I can't remember being as excited about a new year at any point in my 12 years in the channel or the last 10 years at Target. We have significant growth plans for 2009 with further development in the areas where we are successful and a number of exciting new projects - more will be announced in Q1.
