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Are major retailers easier to deal with than wounded animals?

2014-04-25 - David Sables - CEO
Source - The Grocer

We are witnessing a major shift in buying habits away from the big supers and into convenience formats. It’s probably the biggest change to your sales operation in working memory. The share shift into the multiples was much more gradual. The rise of the hard discounters is well documented, as is the success of Waitrose and M&S at the premium end. Commercial functions are having to adapt to the new world in which Aldi and Lidl are some 10%-plus of business. Who’d have thought it, eh? Furthermore, getting into unique formats for price point retail has become more important.

So, lots of new business to come to terms with, which is exciting and demands new thinking. Meanwhile, the big four are being squeezed dry, which might tickle you given the tough times they’ve thrown at you over the years. Trouble is, declining (in share) they may be, but they can still represent 70%-plus of your sales.

When a dog is wounded does it become easier to deal with? And will this also be the reaction of your major buying contacts? Not on your life. Their performance will have the opposite effect. While buoyant, the buyer’s negotiation moves and plays are often a game. Bullying for sure, but easy to deal with if you learn the right skills. It’s crucial that you remain confident in your supplier strength and ambitious in your expectations, pointing out that you know it’s a game and you can play it very well yourself. It’s very different when things are going south. Remember that, as Somerfield declined gradually, they were tough to deal with? The pressure is tangible, the emotions run high and it’s not always an act in these circumstances.

When desperate, retailers have true conviction. They subconsciously transmit this as without your help – ie giving ground – they are going down. More-for-more propositions don’t work as well. They aren’t ‘desperate’ yet though, with the exception of perhaps Morrisons. At this stage, they won’t make crazy decisions. They will, however, make worthless future promises. Be extremely clear on where the deal parameters are, and be firm but not arrogant. So, when they are pushing you to the edge in these circumstances, don’t be sucked in. They are not a charity and you don’t need to donate.

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