An American Perspective on the Hire Industry in the UK

Business is good in the United Kingdom. From small shops to rental superstores you can find success stories across the pond.

I recently toured a variety of rental companies, known as “hire shops” or “plant hire” companies in the UK. These included the single-store independently owned and operated variety as well as the large industrial-focused “super hire store” variety. I also visited the much smaller branch location “convenience store” version of large national chains.

I'm confident that many or most of the strategies that I recommend to rental companies in North America would be beneficial to hire companies as well. The purpose of my visit, however, was to observe and ask questions. I was so impressed with how hospitable all were to me. I received thorough tours and was given plenty of time to observe and ask questions.

Construction and restoration activity stimulates rentals

There was plenty of construction activity (I counted more than 30 large building cranes in London alone). There was a seemingly vibrant building initiative (especially in and around London) with many new large commercial buildings in various stages of construction. Even though there were boom lifts in use, I marveled several times at the popularity of scaffolding. It seemed as though much more of it was in use than when I visited Great Britain about 15 years ago. In addition to seeing massive amounts of scaffolding in use, (it is different from the types of scaffolding most commonly used in the U.S.), the hire companies I visited reported doing a brisk and growing business in this equipment.

Perhaps more important for most hire companies is the massive amount of restoration work that is apparent throughout the UK. Many of the buildings are significantly older than you would see in North America and it is evident that there is considerable effort to preserve and restore these historic structures.

In general, hire businesses appeared to be doing well, with some notable exceptions.

Energy production is a big business in parts of the United Kingdom just as it is in parts of the US, Canada and Mexico. Of course, the dramatic decline in oil prices has had a very negative effect on the hire businesses in these oil production areas similar to the negative effect the oil glut has had on “oil patch” rental companies in North America. One of the plant hire businesses I spent time visiting was heavily geared to supplying the oil pipeline and refinery industry in the area. The transportation and refining of North Sea oil necessitates tremendous infrastructure and the need for rental equipment to build, maintain and repair the pipelines and refineries. (I can’t recall ever seeing such a huge breadth and depth of welding rental equipment.) But this operation, even with its emphasis on serving the oil industry appeared to be healthy and able to adjust to the downturn.

One of the independently owned and operated hire shops I visited was a terrific example of a success story. This business primarily serves homeowners and small contractors. It provides log splitters, sod cutters, lawn core aerators, floor sanders, pressure washers and many other do-it-yourself type rental items along with the towable air compressors, scaffolding, electric hammers, rotary hammers, compact excavators, vibrating plate compactors, rammers and the like for contractors. Sounds familiar doesn’t it? It continually added equipment requested by customers and is apparently successful. It also rented small canopies and barbeque grills on a regular basis during the nice weather seasons. (The area has harsh winters like in parts of the U.S. and Canada.) 

But, when I asked if they rented other party or special event items, even the manager said they never received any requests for any other items. I specifically asked about table and chair requests (that would seem to be natural requests by customers requesting canopies) but again, the manager stated that for some reason, there were no requests for these two staple inventory items. I thought this was interesting because in North America tables and chairs are often requested when a rental company carries canopies or tents in its inventory. But again, I was there to listen and observe and not to teach nor to give advice.

One area of the business that I observed in two of the chain hire operations that I feel might be superior to many North American rental companies is in the area of equipment safety inspection and testing. This was particularly evident in the area of electrical safety testing. In both small and large branch stores there were large electrical testing cages. These had large warning lights that indicated to anyone within at least 25 feet of the testing area when testing was being conducted within the cage. Red lights indicated “do not enter the cage” for safety’s sake and green lights indicated when tests were over and it was safe to enter the cage. A chain across the entry also had to be in place to start tests.

Brits love the rental business too

I didn’t hear anyone lamenting about how difficult certain customers can be at times. I had the rewarding opportunity to interview employees as well as management and, perhaps surprisingly, I heard no complaints about anything. All were very friendly, dedicated professionals who indicated their pride in their knowledge and their hire company. One even used the words “I love the hire business and the equipment too." He even complimented me by saying that he could tell from my questions and my comments that I loved the business, too. It certainly is a fascinating business trade.

Sometimes I think that many rental business people in North America have the perception that North American rental business practices are all significantly superior to those in other countries. I don’t think that this is true. Instead, I view the hire companies in the UK as just as focused on business success as North American firms and that we are all cut from the same cloth. We are all professionals who work hard and sincerely want to grow business. Cheers to all of my new friends in the United Kingdom.

Postscript: I was in the UK a week before the United Kingdom’s referendum to leave the European Union. Since the vote was for the UK to leave the EU, there are bound to be some sizable changes in the UK's economy. Even though the divorce between the UK and the EU might take the full two years (the deadline) to be finalized, the impact on equipment rental businesses could be significant. The UK has a major influence on the US economy and what happens to the hire industry in the UK should be of interest to all of us.