I have been in the grocery business since 1955 and have purchased groceries from the same warehouse that has changed owners four times. I have had wholesaler assistance but have never signed a supply agreement.
And remember that wholesalers have risks, too. They have assisted retailers with various programs, such as financing, only to see retailers cherry-picking other wholesalers and suppliers for merchandise. Retailers have an obligation to the distributor; if the distributor sets you up in a venture you couldn't have put together alone, the retailer should give all its business to that wholesaler in compensation for risks involved.
As for Fleming and the issue of inside margin on private labels, Fleming's sales plan states that there will be an inside margin on private-label purchases. Fleming also has special promotions throughout the year to enhance private-label sales, so a retailer gets that money back through private-label promotions.
I find Fleming's people do have retailers' well-being in mind. I do not agree that Fleming's business practices are fraudulent. Neither Fleming nor Supervalu nor any other warehouse can survive
It is human to blame others for failures, but when our business declines or falters, we go back to these basics: store appearance inside and outside; the meat, produce and hot-deli departments; the pricing structure on basic grocery; direct-store-delivery allowances and pricing, and friendliness.
We always strive for improvement in these areas, and I do not believe that a wholesaler alone could be the cause of a business failure. -- PAUL ZATICA owner Paul's Markets Homedale, Idaho
After all the negative information and opinions on Fleming's current condition, I thought you might be interested in a [letter] that allows your readers to look at the entire picture. We are owners/operators of a 54,000-square-foot independent price-impact store in Portland, Ore., supplied by Fleming. We have a total of 62 years of experience in the grocery industry.
One year and two months ago, Vision 2000 was introduced to the Oregon market, and we were one of the first stores to go on-line. While many operators have spent the last year expressing negative opinions, we have had one of the most profitable years in our store's history. Vision 2000 and the new Flexible Marketing Plan have had a great deal to do with our 1995-96 success. Here are a few of the ways Vision 2000 has contributed:
An improvement on our grocery gross profit of 5.1% (average period ended February 1996). This is due to a system that rewards us for operating more efficiently -- for example, taking fewer deliveries per week and ensuring that each truck is as full as possible.
Many of the dollars that used to go to Fleming's bottom line, such as warehouse slotting and rebates, are now shared among the retailers.
Charges for all services are now line items on our weekly statement, which gives us a clear picture of all costs.
A new computer system (Visionet) loaded with a variety of new programs that allows us to buy from our vendors at the lowest possible price.
We are also a member of the 15-store "Oregon Price Impact Group." All 15 stores in our buying coalition are high-volume grocery operations in Oregon and southern Washington. The owners unanimously agree that Fleming's new program has positively influenced our bottom lines. All this negative visibility is detracting from what we think is the key issue: Is Fleming helping us to be more competitive, more profitable, better operators? The answer from the Oregon market is a resounding yes!
In [SN's April 15] article on [the death of] George Jenkins [founder of Publix, Lakeland, Fla.,] the writer mentioned Mr. Jenkins' "abiding concern for his customers and employees." I would add that Mr. Jenkins also exhibited a like concern for his suppliers. He always treated the salespeople who supplied Publix with respect and integrity. The supplier community has lost a great friend.