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Supermarket sales volumes up for the first time in 18 months - but how was it for you?

| International retailers

Latest data from Nielsen showing that sales volumes in the UK’s leading supermarkets increased 0.6% during the four weeks ending 3 January 2015 produced a collective sigh of relief, and possibly a feeling to the effect that 'it’s all over now, back to business as usual'.

However, suppliers that have never had a better year, and are hoping that no-one, least of all the ‘down-to-us’ retailers, has noticed, will have realised that it is always ‘business as usual’, with success coming to those that can factor any market conditions into customer strategies, and maintain growth.

For them, structural changes are simply a re-balancing of demand on the way to what will probably end up as Tesco 25%, Sainsbury’s, Asda and Morrisons sharing 40%, with the remainder going to the middle-squeezers…

Meanwhile, those suppliers that are still shell-shocked following seven - yes seven - years of flatline demand, having cut to the bone, are licking their wounds, yet hopefully finding time to continually run the numbers on every aspect of the trade investment package, in a constant search for ways of optimising cost and value..

Despite the punishment, they need to summon the energy to dig into the Nielsen data in order to compare category volume growth with customer equivalent and ideally confirm their fair-share of any improvement in sales.

Then comes a re-assessment of their competitive appeal vs. other category players, as a basis of re-engineering their entire trade investment package, by customer.

Given the forensic intensity of the trade investment spotlight (SFO), coupled with the need for high-intensity price-cutting by the mults, it is vital for suppliers to anticipate significant shifts from back to front margin, everywhere…

Only then can we assume that we are ‘back to normal’ in supplier-retailer trading relationships…in anticipation of mults' claims that, having dealt away the increases in front margins via price-cutting, there is now a need for 'a little extra to create some excitement in store' ... 

 

Posted by Brian Moore

 

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