NEW YORK -- The Efficient Consumer Response subcommittee charged with producing a best practices report in the highly contentious trade promotions area has postponed the mailing of an industrywide survey on the subject.
The survey was to have been sent out this month to an estimated 125 food industry companies, including retailers, wholesalers, manufacturers and brokers. The results were to have served as the cornerstone for the long-awaited ECR best practices report on trade promotions.
But difficulties in addressing the sensitive questions and possible legal ramifications surrounding the issue of trade promotional practices apparently have stalled, if not killed, any broad-scale survey in this area.
"Right now, I'd say there's less than a 50-50 chance there will be a survey in this area," Randy Wedel, co-chairman of the Category Management subcommittee of the Joint Industry Council on ECR, told SN. Wedel is senior vice president of marketing and merchandising at Schnuck Markets, St. Louis.
"We're going to continue to look at this issue," Wedel said, "but we're not certain a survey tool will be used."
The survey, the topic of several ongoing subcommittee meetings and open industry discussions over the past several months, was designed to gather specific information on current industry promotional practices.
At the Food Marketing Institute's annual convention in May, Donald Dufek, co-chairman of the ECR Best Practices Operating Committee of the Joint Industry Council, and senior vice president
of Kroger Co., Cincinnati, outlined progress of several ECR subcommittee projects, including efficient promotion.
At the time, Dufek stated that work in "deal simplification and promotional practices is taking a little bit longer" than in other ECR initiatives. "But I'm happy to report to you today that the committee is well under way, has established plans and protocols, to start with an industry survey."
The committee's plans had called for a four-part survey series, each survey tailored specifically to retailers, manufacturers, distributors and brokers, Steve Sotzing, a partner with Andersen Consulting, Chicago, said at a conference on category management sponsored by the Grocery Manufacturers of America in May.
"The concept of efficient promotion is enormously tricky," Sotzing said at the time. "There are some understandable reasons why we have to be careful with how prescriptive we are as a committee."
But Sotzing, whose firm was to manage and compile the survey results, said the survey would go out in June. The project's goal, he added, was to "understand current practices across the industry that can contribute to more effective and more efficient trade promotion."
Among the practices identified by the ECR Best Practices Operating Committee as being significantly inefficient are forward buying and diverting.
Some industry experts estimate that only 30 cents on the dollar of any given trade promotion actually reaches the consumer level. The remaining promotional funds get trapped in the distribution system, a phenomenon decribed as "wasteful" by ECR advocates and "profitable" by wholesalers and retailers.
"How many of us actually analyze individual promotions and events in a global sense?" he asked. "Some people do. Some people don't. Most people don't."
Individual company strategies would not be revealed by the survey report, he emphasized; rather, the observations would be incorporated with other data in a broader sense.