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The Big Four all had a Disastrous Christmas – Beware The Fallout

2014-01-27 - David Sables - CEO
Source - The Grocer

So how was Christmas for you? You were hoping for an iPad, and got a cookbook. Well, maybe you didn’t get what you wanted but still, look on the bright side, you could be Dalton Philips. The pressure facing Morison’s now is palpable. It’s not incredible that a lead retailer can underperform in the key season. What is unusual, however, is that it seems the top four have all had a nightmare in the same Christmas. Philip, Andy, and Justin are not feeling like the three wise men right now either.

Think back: has this ever happened in your sales career? This really is unprecedented and its worth reflecting on how it will affect you if you supply the multiples. Normally you can turn to one of the other big boys to prop up your business when one throws you over the cliff, but not this time. Many suppliers who don’t have a channel spread will find more than half of their customer base is now piling pressure on to compensate for their lost profits, and will most certainly now compete aggressively on price to compound the issues you will face.

The cause behind this abysmal performance is beyond pricing and promotion strategy. It’s not explained by range and merchandising. It’s structural; there are bricks and mortar in the form of huge stores that just don’t have the footfall they were built for. This problem won’t disappear. We can see these expensive assets being turned over to picking warehouses, or in-store gyms. It’s already starting; the larger stores that are wrong for today’s shoppers have to find a new reason to exist or they have to go. Again, what’s the implication for suppliers? If you check your weighted distribution and find you are primarily stocked in the larger stores, then you have a looming issue. Your distribution is not deep enough. You need a story to get into the smaller fixtures. It’s going to be more competitive in even less space.

Try getting across insightful commercial selling stories to justify why you belong in smaller fixtures while the buyer is blaming you for breaking their Xbox. You need focus and control. Never before has the need for selling and negotiation skills to come together been more vivid. Retailers’ cries for help will sound like demands for money.

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