Good in-store implementation of shelf-set schematics is important, and is recognized as being important by managers of independent supermarkets, but it's just not happening: "The infrastructure for excellence is just not there. The result is missed opportunities."
So said the moderator of a panel convened at last week's Food Distributor International business conference in Atlanta. The panel discussion at the meeting represented the first exposure of FDI's developing study on retail coverage.
As you'll see in my news article on the front page, the report was critical of the wholesaler-supplied sector in ways such as the quote above suggests. It also offered a couple of straightforward ways by which independents and their wholesalers might be able to increase sales and profits. Chief among those methods were better store-level execution of Planograms, and the need to get new products to the shelf in a timely way. (As for the latter, it could be suggested that, given the failure rate of new products, slow execution may or may not be such a disadvantage.)
But offering profit guides was far from all the panel discussion contained. Indeed, much of the talk was more than a little critical of the entire wholesaler-retailer process and relationship.
There's a bit of a tradition at FDI to strike to the heart of the industry's problems, and to set them forth more starkly than is generally the practice on the trade-show circuit. For instance, I'm reminded of FDI's study of a half-dozen years ago that highlighted wholesalers' dependence on "inside margin," or the propensity to generate profit by buying, not selling, product. A couple of years ago, FDI issued another study that, among many other things, described the relatively small share of business in fast-growing trade channels that wholesalers possess. It also underscored how rapidly wholesalers have consolidated, or vanished.
So let's take a look at some of the comments made by the panel that issued its findings last week. This dialogue came in connection with some general observations about the state of wholesaling and independent retailing:
The vacuum effect: "Store-level decisions are simply not being connected in any systematic way with any planning process [linking] back to wholesaler decision-making."
The drift effect: "Implementation isn't owned at store level; it's not sufficiently managed. Training and policies are lacking."
The bulletin-overload effect: "Information coming from wholesalers [to stores] really isn't helping implementation at store level. Generic recommendations are made that are very tactically based. They are being largely ignored by retailers."
The repetition effect: "There's no feedback link to talk about what works at store level. Guess what happens? A lot of repeat inefficient work happens."
Frank dialogue such as this is all to the good. If there is no forthright talk, how can solutions arise?