DALLAS -- Building on the strength of its centralized procurement system, Fleming just concluded its first national sales event for independent grocers.
Based primarily on Center Store products, such as well-known brands like Hunts, Kellogg's, Kraft and Campbell, the sale provided the independent customers of Fleming with bonus deals that would result in lower prices for their customers, said Shane Boyd, vice president, communications. Boyd said he could not reveal specific discounts or sales results. Deadline for orders was Oct. 12.
"We are just at the cusp of leveraging the benefits of centralized procurement," he told SN. "We've had other types of promotions, events and deals that we've been able to generate through this new procurement operation, but this is the first one of its kind for us." Fleming consolidated its procurement into one operation about a year and a half ago from 22 different locations, he said.
National promotions similar to this are not new to at least one of Fleming's competitors, Supervalu, Eden Prairie, Minn. "Supervalu has been conducting national sales events for many years," said Polly Deane, a spokeswoman for the wholesaler. While the Fleming event is targeted at its independent customers, Supervalu's sales are for all grocery customers. "We would leverage our size to the advantage of all the grocers we serve," she said.
In contrast to Fleming's central procurement, Supervalu uses a "modified central procurement system," Deane said. "That allows us to leverage our size and buying power on a national scale, while allowing us to remain responsive to consumers at a local level."
Fleming's central procurement center for consumables is the second largest of its kind in the country, following that of Wal-Mart Stores, Bentonville, Ark., Boyd said. "It gives us a national buying office that was able to put this national sales event together in conjunction with our vendors," he said.
The wholesaler centralized its purchasing primarily to benefit its independent customers, which represent about half of the company's sales, he said. "That's something new for the independents. Chains have had it before for their own procurement, but still not on this scale. Nobody has it on this scale other than Wal-Mart," Boyd said. Among the categories involved in the promotion were grocery, frozen, dairy, meat, produce, deli, bakery, general merchandise, health and beauty care, and specialty items. Fleming serves about 3,000 supermarkets, 6,800 convenience stores and over 2,000 supercenters and other types of grocery establishments.
"Centralized procurement is a powerful resource for our customers and we believe we are seeing just the beginning of what it can offer," said Steve Davis, executive vice president and president, wholesale, at Fleming, in a prepared statement. "We are proud to be able to offer this terrific National Selling Event and are excited about the even greater opportunities in the future."
Boyd would not disclose Fleming's plans for the future, except to acknowledge that there will be more national sales events, as well as other promotions based on the central procurement center. In the past, the company has offered "Weekly Grand Slams" and "Consortium Buys" to its customers. "This is the first national event. We feel that we are just at the beginning of the process," he said.
The national sales event also took advantage of Fleming's Visionet Internet portal, which incorporates a private trading exchange with communications to its customers. Vendors can post bulletins and deal information, and some grocers use the system as their intranet, Boyd said.
"So you can get information about the deals, but you can also place the order through Visionet," he said, noting that most of the orders for the national sales event were processed through Visionet.