Formed in 2003, NBG has over 80 Partner merchants who collectively operate through more than 300 outlets across the whole UK, from the Channel Islands to the north of Scotland. This coverage translates into a robust regional structure, ensuring that every Partner has an equal voice within the NBG community.
“NBG was started as a way to provide independent merchants with the sort of buying power capable of competing with the major national merchants,” says Nick. “Over the last 20 years, our Group has grown to the point where we now comprise of 85 independent merchant Partners with a total of 310 branches. This collective gives us a buying power equivalent to £1billion per annum, while we also have 370 Supplier agreements in place across all product categories.
“What makes NBG unique, and what I believe is at the heart of our success, are our democratic values that inform every part of how we operate, resulting a strong community. NBG is a partnership, and our Partners set the priorities and direction with all decisions that will impact the Group are discussed and voted upon.”
Democracy is key – all Partners have an opportunity to be heard and have an influence on the decisions of the Group. By maintaining this commitment, it fosters ‘fairness and openness’ rather than a centralised approach that dictates rather than manages by consensus.
Driving aims
“Our aim is to support independent merchants to buy better, primarily through our Category Management Teams which are committed to securing the best deals for our Partners,” says Nick. “Ultimately, we strive to ensure our
network is stronger than the sum of its parts, which is why our Partners are so committed to supporting these Supplier agreements. Buying better and driving business success doesn’t just rely on pricing agreements, however. Deeply rooted within the Group is a supportive culture that includes discussion forums, business advice, and social gatherings. When a new merchant Partner joins NBG, they always find strong support right from the start and see immediate benefits to their business.”
A recent NBG report identified a disconnect between merchants and suppliers – why was that? “The survey ran as the sector was regaining a sense of normality post-COVID,” says Nick. “With some suppliers still working from home resulting in meaningful conversations between merchants and Suppliers simply weren’t happening frequently enough. This led to a skewed perception from Suppliers that they were delivering a strong level of service despite our Partners feeling quite strongly that their experience was nowhere near as positive. The reality is, both parties need to be conversing frequently to ensure relationships remain productive.
“We understand why there may have been a disconnect – as our survey confirmed, the high sales volumes, stock shortages, increased cost of raw materials and energy meant many Suppliers were likely to have focused internally to mitigate potential negative impacts. However, given the economic challenges that followed and continue to challenge the sector, more joined-up thinking and communication is required. This is especially the case for independent merchants, where sales are reliant on support in the form of training, product information and competitive pricing from Suppliers.”
Reducing plastic packaging
Sustainable packaging is key concern within the merchant sector – as is reducing and recycling waste generally – and the NBG is driving these important messages throughout the sector via its membership. NBG strongly supports the requirement for sustainable solutions that are economically viable and have been active in several projects. 
“Ahead of the Plastic Packaging Tax (PPT) and the Extended Producer Responsibility (EPR) introductions, we commissioned a recycling expert to explore what these changes will mean for merchants of building supplies,” adds Nick. “This resulted in the formation of a working group and an in-depth audit of one of our Partners’ operations which projected a staggering potential increase in costs for both merchants and Suppliers alike, although subsequently many of these costs were removed from merchants as the legislation was developed and finalised.
“As well as leading us to accelerate talks with Suppliers around the subject, it also enabled us to educate our Partner and Supplier network on the steps they could take to reduce their reliance on plastic packaging. Every one of our Partners and Suppliers has since been issued with guidance documents on how to navigate the financial obligations around plastic packaging and we’re continuing to take every possible step to help both to navigate emerging sustainability challenges.”
Commoditised products
Timber is a very important category within NBG, and it has a strategy of ‘Building Strong Brands’ as they see themselves as a conduit to get the manufacturers’ products efficiently to market, whilst supporting their brand values. Nick says: “With commoditised products, this can be more challenging but one of our guiding principles is that we work with our Suppliers to sell their products.” “A number of our merchants specialising in timber drive the agreement negotiations with our Suppliers on a monthly or annual basis depending on the product areas. Due to the nature of NBG being a national organisation with merchants who order in different ways, we need a range of Supplier solutions to meet the requirements of the whole Group.
“The solutions will be a combination of factors to ensure we get the best prices, quality, service and ranges to meet the individual merchant’s needs. When the deal is done, we then aim to work proactively with our Suppliers to drive volume through an agreed sales plan which is regularly reviewed.
“There’s been a lot of volatility in the timber market over the past three years or so. No doubt this will continue as the market demand softens. We still have inflation to contend with and are always trying to make progress on sustainability, so there are still challenges to be overcome. As we look at the remainder of this year and beyond, our plans will remain centred around negotiating the best possible deals and Supplier-led support for our Partners, while asking them to support those deals wherever possible.”
More at www.nationalbuyinggroup.com
