Post-Recession Relationships

C-store operators have long grumbled about their relationships with the world's largest consumer products makers, whose new product introductions, pricing, merchandising and marketing strategies have a profound effect on retail category management efforts. For every company praised by retailers for their ability to partner for mutual benefit, there are others that elicit disgruntled mutters.

The recession, however, is altering the give-and-take of the retailer/supplier relationship. As the recession eases, name brand makers will be under even greater pressure, according to Deloitte LLP, which recently presented a list of 2010 trends for retailers and consumer products.

Among Deloitte's predictions: The retail industry will continue to consolidate and operators will expand their private-label programs. This is likely to mean more power for the retailers left standing, as they reduce overall shelf space and give much of the remaining space to store brands.

Retailers already are reducing the number of brands on the shelf and, in some cases, removing entire categories. For example, Deloitte pointed out, under its “Win-Play-Show” initiative, Walmart is reducing product assortment by 15 to 18 percent.

In response to these changes, suppliers will be forced to monitor even more closely a perpetual point of retailer/supplier contention -- pricing.  At the same time, Deloitte predicts, they will continue cost-saving initiatives, from divesting non-core or lower-margin brands to product rationalization and co-manufacturing with other manufacturers.

As retailers increasingly position their own brands through private label and original menu items, it will be interesting to see where consumer goods makers put their money and where they cut back. New product development, retailer incentives, consumer marketing -- or e-commerce efforts, to bypass retail altogether?

The give/take continues. -- Barbara Grondin Francella

 

Comments

[Portable Storage]

Thanks for the information and I think that many of the companies has crumbled in this recession period and I hope that they recover out from this economic financial crisis as soon as it is possible.

Thanks,
Portable Storage,
http://www.moveablecubicle.com