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Partnership is the way forward...
It is easy for Retailers to view enviously the success of their suppliers, and for suppliers to resent the pressure exerted on them by retailers. Is this a reasonable view, or is mutual success the best route to success? Profitable suppliers can benefit retailers through:- Quality Assurance and the ongoing supply of great tasting products that drive shopper loyalty.
- Competitive pricing and trade support. Suppliers understand the price elasticity of their brands and therefore enable Retailers to maximise category value.
- Efficient and sustainable logistics. Sustainable logistics is vital to enable retailers achieve their ‘green’ targets.
- Strong relationships. If retailers truly engage with their suppliers’, then supplier’s research and insights can add value to their offer. It can also result in the delivery on instore exclusives that drives footfall to their stores.
- Access to customer focused product ranges. Great suppliers are at the forefront of research and development and are constantly monitoring shopper/consumer trends to help retailers to be ‘future proofed’.
- Investment: Most retailers rely on supplier investment to be profitable; without profitable suppliers this vital revenue stream would be put under enormous pressure.
- Own Label development: Without the innovation that suppliers research, product development and investment drives product categories would become ‘stale’ and quickly lose shopper interaction. Retailers would also find it extremely more expensive to develop and maintain their own label ranges that currently follows the lead set by leading suppliers.
- Promotions: Suppliers invest billions every year with retailer to promote their products in store. If suppliers could not support promotions with the investment they currently provide then the existing retail model would be unsustainable. Kantar (Kantar market report Nov ’25) estimates that promotions represent 28% of total grocery spending!
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