FDI SETS UP STUDY TO IMPROVE RETAIL COVERAGE

DAVID MERREFIELD

DALLAS -- A major problem facing the wholesaler-supplied sector of retailing has formed around the issue of retail coverage, specifically the declining ability of suppliers to provide a full range of services to the retailers, according to John R. Block, president of Food Distributors International.

Block's observation came during his president's report at FDI's Annual Business Conference Partners Program here earlier this month. He said that because of mounting concerns about retail coverage, FDI has commissioned a major study on the topic to be executed by the Partnering Group. Results are to be presented at next year's meeting, to be March 5 to 8 in Atlanta.

"Over the years, supermarket operators have relied on suppliers and brokers to carry out planograms, set shelves and maintain them," Block observed. "It has helped with labor costs.

"As companies move to cut costs, the condition of store shelves is deteriorating. It's a serious problem and one of potential serious conflict. It's not just suppliers. They're our friends and they do a great job. It's everyone involved in the process.

"And, truthfully, retailers need to understand that their wholesalers can provide a lot of help in this area. I'm not talking about the physical part of setting shelves. I'm talking about providing sound category management and merchandising plans that, if implemented, can boost profits."

But, he said, retailers are sometimes loath to take advantage of such programs, even if they are made available by wholesalers.

"Why is there a lack of acceptance of such programs? Why won't independent retailers implement them?" Block asked. "Because all too often wholesalers don't recognize the everyday problems that take place at store level. Some retailers consider category management as just so much pie in the sky.

"So there needs to be better understanding on path parts. Retailers and wholesalers need to talk to each other, get rid of suspicion and work together."

Indeed, later in his talk Block asserted that his outlook on trade relations is that they are improving but that the wholesaler-retailer relationship needs some work.

"My perspective [on trade relations] is that relations between suppliers and distributors have improved some, but that things could be a lot better between wholesalers and their retail customers.

"We should be shocked that it has to be said. We can pretend it's not true, but we all know better. Now is the time to do something about it."

At the same session, talks by Robert Emmons, FDI chairman, and William Mouskondis, International Foodservice Distributors Association chairman, were presented. FDI and IFDA, related associations, are based in Falls Church, Va.

Emmons said the "Strategies 2005" report about the future of wholesaling, described in last week's SN, was augmented by information gathered last year that focused on food-service unsalables, electronic data interchange and backhaul.

Moreover, the earlier "Food Service 2005" study is to be updated and project a view to 2010.

Referring to the food-service project, Mouskondis told the audience that it's a "huge undertaking [which will] require substantial funding assistance, but the result will be of significant benefit for IFDA members and trading partners."