PORTLAND, Ore. -- Five co-op wholesalers have embarked on a nonfood business plan to become more competitive with Wal-Mart and other discount retailers.
The yet-to-be-named organization is set to be launched at mid-year 2000 for buying everyday national-brand general-merchandise and health and beauty care products, Richard Parkinson, president and chief executive officer of Associated Food Stores, Salt Lake City, one of the co-op wholesalers involved in the business plan, told SN. "Promotional and seasonal programs will be an essential part of this program," he said.
The business plan is designed to give the co-ops' retailers "better purchasing power and an opportunity for them to reflect the lower costs to their consumers," Parkinson explained, adding "advertising and regional go-to-market strategies will be maintained on a regional basis at each respective house."
Under the business plan, buyers from each co-op warehouse will relocate to the co-ops' Western Family Foods private-label facility here, where the consolidated nonfood orders will be placed with vendors. Products will be shipped to each co-op warehouse.
Other co-op wholesalers involved in the nonfood-procurement plan include URM Stores, Spokane, Wash.; Associated Grocers, Seattle; Affiliated Foods, Amarillo, Texas; and United Grocers, Portland, Ore., now part of Unified Western Grocers after the merger with Certified Grocers of California, Los Angeles.
Although Certified Grocers of California was one of the co-ops involved in talks to create the nonfood-buying alliance, the wholesaler has yet to accept the final business plan, Parkinson said.
"The new business plan will cut across all brands and involve much larger combined orders, and move us into the Top 50 national scale [ranking] for procurement of general merchandise and health and beauty care," Parkinson said.
The co-ops have been in talks for the past two years about creating such a nonfood business plan, which would better position their several thousand members to be more price competitive.
The co-ops' buying consortium, which includes Certified Grocers of California, for contract purchasing of limited general-merchandise lines like aluminum foilware, kitchen tools and gadgets and plasticware, will be folded into the new nonfood business plan.