After a period of acquisition-led expansion, Huws Gray is investing in training, technology and a single national identity. CEO Daksh Gupta and CFO Jon White explain how the builders’ merchant is trying to improve productivity and customer service while construction remains under pressure…
Huws Gray has a sizeable integration job on its hands. The builders’ merchant grew steadily from its founding in 1990, reaching around 60 locations over almost three decades. Expansion then accelerated, first with a major deal in 2018 and subsequently through acquisitions including Buildbase from Grafton.
The result is a business that now accounts for around 12 per cent of UK building materials sales, according to chief executive Daksh Gupta. But scale has also brought a different set of management requirements.
“When you are a £180m business, you can be a lot more entrepreneurial,” Gupta says. “When you are nine times the size, you cannot run it in the same way.”
The priority now for Gupta and his team is to turn a collection of businesses with strong regional identities into a more integrated national group, while retaining the local decision-making and product knowledge on which merchanting depends.
That task is taking place against a difficult market. Gupta says construction volumes are around 28 per cent lower, while new housing plot starts have fallen sharply. At the same time, customers are contending with higher mortgage costs and reduced disposable income.
Huws Gray is responding with an extensive transformation programme. There are currently 27 major initiatives being reviewed by the group each week, covering areas including technology, customer experience and operating infrastructure.
Gupta argues that delaying investment simply because the market is weak risks storing up bigger problems.
“You could easily say, ‘Push some of these out to Q1 2027,’” he says. “But if you do that, you could then say push it out to Q2, Q3, and then nothing gets done.”
Investing in frontline capability
One area the group has deliberately protected is training.
Gupta, who joined Huws Gray after a long career in automotive including 15 years running Marshall Motor Holdings, says training budgets are frequently among the first areas businesses target when margins come under pressure.
Huws Gray has taken the opposite approach. It has established an internal training academy and is investing in a dedicated training centre. In one recent quarter, Gupta says around 1,500 colleagues, approximately a third of the workforce, received a combined 11,000 hours of training.
“Repetition is the mother of skill,” he says.
The investment reflects the level of expertise required in builders’ merchanting. CFO Jon White, who spent eight years at Pets at Home before joining Huws Gray, says the parallels with more conventional retail businesses are stronger than they initially appear.
“It’s multi-site. It’s all about the people, it’s all about the training,” he says.
White compares Huws Gray’s opportunity with Pets at Home’s development of a broader ecosystem around the pet owner. Huws Gray wants to become a similar one-stop destination for builders, spanning core building materials as well as kitchens, bathrooms, timber and specialist products.
For many independent tradespeople, the relationship goes further than a straightforward retail transaction.
“We are the supply chain in many cases,” White says.
That makes availability, advice and speed particularly important. Gupta points out that builders effectively “sell time”: repeated journeys to source missing materials or chase deliveries reduce the number of productive hours they can charge to a job.
Training therefore has a direct commercial purpose. Colleagues need sufficient product knowledge to help customers obtain the right materials, but they also operate in a market where pricing is considerably more fluid than in conventional retail.
White notes that the same product can be sold at different prices across Huws Gray’s branch network depending on local market conditions.
Employees need the confidence to strike the right balance between “making a margin, making the sale, and recognising the value that the holistic Huws Gray proposition offers”.
In that environment, frontline capability affects both customer retention and gross margin.
Applying retail expectations to merchanting
Technology represents another major area of investment.
Rather than pursuing digitalisation as a standalone channel strategy, Gupta says the company is focusing on areas where technology can remove operational friction.
One example is delivery tracking. Around 30 per cent of calls received by the business relate to customers asking where their delivery is, he says.
Gupta uses Amazon as the benchmark. Its customers generally receive sufficient information about a delivery that they do not need to contact the retailer.
“If Amazon can do it, why can’t building material companies do it?”
Huws Gray is rolling out electronic proof-of-delivery technology designed to provide customers with greater visibility over orders.
The productivity case is as important as the customer-service benefit. Reducing routine delivery enquiries should release employees to spend more time following up quotations and dealing with customers.
It is a useful example of how Huws Gray is approaching its wider technology programme: investments are expected either to improve the customer proposition, increase productivity or deliver both.
The company has also replatformed its website, improved its product information and says online sales are growing at a high double-digit rate.
Gupta believes digital capability will become increasingly important as the demographics of the trade customer change.
“You’ve got the next generation coming through, and they don’t want to necessarily buy by going into a merchant,” he says. “We need to make it easy for them.”
The group has also introduced performance marketing to give it a clearer understanding of where enquiries originate and the return generated by marketing expenditure.
Building one Huws Gray
Alongside operational change, Huws Gray is attempting to establish a clearer national identity.
Acquisition left Huws Gray with businesses that had considerable recognition in their respective regional markets but relatively limited awareness of the group nationally.
A new brand identity launched last year is now being rolled through the estate and vehicle fleet.
Gupta says unprompted brand awareness has increased by 159 per cent over two years, although from a low base, and currently stands at around seven per cent.
The company’s sponsorship of professional football referees has been its most prominent national marketing investment.
The choice was partly about avoiding the tribalism associated with backing an individual club, but Gupta also argues that attributes associated with officiating (impartiality, integrity and assurance) fit the position Huws Gray wants to establish.
The integration effort is equally focused internally.
White says management structures have been simplified to remove layers, while quarterly roadshows enable the leadership team to meet branch managers and assistant managers around the country. The group also holds leadership conferences and uses regular video communication to maintain consistency across the estate.
“It’s all about keeping people connected,” White says.
That communication infrastructure is becoming more important as the number of transformation projects increases.
White says Huws Gray has no shortage of potential initiatives; the challenge is deciding where management attention and capital will produce the greatest return.
The company assesses projects not simply on immediate financial contribution but on their impact on customer experience, employee productivity and the long-term operating model.
“We will step back regularly and review,” White says. “But you look at these things and say the opportunities are so good. We’ve just got to do it and make it work.” He describes Huws Gray as “kind of like a large disruptor”.
That description captures the operating challenge facing the company. Huws Gray has already achieved significant scale through acquisition.
The next stage is to extract more value from that scale through common systems, stronger data, broader brand recognition and greater purchasing and operational efficiency, without removing the local knowledge and commercial judgement that remain important to its customers.
In a construction market offering little help from underlying demand, delivering that combination will be the test of Huws Gray’s next phase of growth.
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