AM Awards: Retail Group (ten sites or more), Arnold Clark Automobiles

Best Retail Group (ten sites or more) sponsored by Mobil

Acquisitions and a move away from its Scottish heartland into northern and central England have not dented Arnold Clark Automobiles’ ability to make money.

The group consistently posts return on sales of around 3% – a margin target that every franchise manager is expected to achieve.

It is helped by Arnold Clark’s resolute focus on used car sales – it sells more than any other UK retailer.

That’s not to say the company doesn’t perform in new cars – it does. Without the new car business, it would not have the access to the thousands of used cars it does.

“Everything revolves around selling cars,” said Eddie Hawthorne, Arnold Clark managing director.

Arnold Clark’s dominant position is not lost on its franchise partners: manufacturers privately talk about how crucial Arnold Clark is to their volume aspirations.

The prevailing philosophy is to take a small margin from each part of the business – new/used car sales, finance, warranties, service plans, insurance – with a view to selling them in large quantities.

Company policy, set by founder and majority shareholder Sir Arnold Clark more than 50 years ago, requires growth to be self-funded: the company has no borrowings. Sir Arnold rarely takes a share-holder’s dividend, preferring to reinvest in the group.

Hawthorne said: “We invest in a branch, put in our process and start to sell cars. It’s a simple business”.

It’s an approach that has taken Arnold Clark to just over £2 billion turnover, making it the fourth largest retail group in the country with 1more than 100 dealerships.

The company is committed to customer service and recognises the importance for ongoing staff training.

In 2003 it acquired GTG, a training organisation with centres in Glasgow and Edinburgh, which is used for both internal and external training.

Of Arnold Clark’s customer service ethos, Hawthorne said: “It’s the very simple basics – you keep the customer happy, they come back. The customer comes back, you make more money. It is not any more difficult than that.”

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