Sponsored By

REGIONALS SEEK SUPPLIER PARTNERSHIPS, SUPPORT 2004-06-21 (2)

WHITE SULPHUR SPRINGS, W.Va. -- Regional retailers are lobbying suppliers for stronger partnerships by underscoring their local expertise and staying power.These retailers are hoping to capitalize on the recent resurgence of independents and other regional chains by taking their businesses to the next level through closer links with manufacturers."Regionals are your most exciting outlet for opportunities

David Orgel

June 21, 2004

4 Min Read
Supermarket News logo in a gray background | Supermarket News

DAVID ORGEL

WHITE SULPHUR SPRINGS, W.Va. -- Regional retailers are lobbying suppliers for stronger partnerships by underscoring their local expertise and staying power.

These retailers are hoping to capitalize on the recent resurgence of independents and other regional chains by taking their businesses to the next level through closer links with manufacturers.

"Regionals are your most exciting outlet for opportunities in the future," Neil Golub, president and chief executive officer, Golub Corp. and Price Chopper Supermarkets, Schenectady, N.Y., told a supplier audience during a panel session at Grocery Manufacturers of America's Executive Conference here.

"Regionals are becoming more efficient," Golub added. "We're survivors in this business. My company is going into its fourth generation, and we'll be here for a while."

Golub and other retailers on the panel laid out many regional retailer strengths, including: Savvy with loyalty cards and database marketing.

Ability to target consumers by niche segments.

Willingness to build flexible, non-adversarial relationships.

"Regional retailers are very innovative," said David Marsh, president, Marsh Supermarkets, Indianapolis. "If you have ideas and want to partner, we're the company to partner with."

Ross Roeder, chairman and CEO, Smart & Final, Los Angeles, said, "Some bigger chains have adversarial relationships with vendors, but we nurture the relationships. We can't respond to customers without vendor partnerships."

Marsh emphasized his company's loyalty card and customer relationship management capabilities, while Golub stressed his organization's analytical skills. "We're doing a lot of science in evaluating and investigating categories," Golub said.

Roeder said suppliers frequently tap into Smart & Final's database for data mining. "Manufacturers are very interested in data for information on shopping patterns, which helps us shape promotions ... we know if a customer suddenly stops buying something, and we can go back to that customer."

The retailers said their use of data enables them to target specific consumer niches for supplier programs.

"We can talk to only the people interested in you or your product," Golub said.

He noted that Price Chopper publishes magazines for specific customer segments, such as parents with babies, senior citizens and customers seeking healthy lifestyles.

Roeder said Smart & Final "can fill a vendor's need to reach consumers in various communities, such as Asian or Hispanic."

He told SN that "a number of vendors have come to us because they want to do a better job with Hispanic, and we are working on programs to do that." The retailers noted certain challenges to partnering with suppliers, including turnover in manufacturer ranks.

"We must establish new relationships because there are people changes on the manufacturer side," Golub said. "That's why top-to-top conversations are critical to trade partnership success."

Roeder said establishing trust is the foundation for retailer-supplier relationships.

"I worry about the competitive information we have," he said. "I worry about sharing what we know with customers. I hesitate to sit in a room with vendors I don't know, and share our knowledge base on the customer. So it's about can we develop a level of trust. Vendors must share what they know as well."

Smart & Final also needs vendors to make available the full range of products, Roeder emphasized. "We need your products for the retail, food-service and club channels," he told suppliers. "Some suppliers have different silos in their companies for these channels. Tear those down because the silos present a real challenge at some companies."

In seeking assistance from suppliers, regional retailers are looking for their fair share of resources compared to what national chains receive.

"We carry a bigger breadth of products than other trade channels," Marsh said. "We need more resources for shelf management, but more of it is going to national accounts. We need those resources."

Some retailers need help with new-item introductions. "We set up smart teams to reset stores," Golub said. "We need your cooperation with all the new items."

Roeder underscored Smart & Final's need to develop new products for certain customers, particularly those on the business side. "Some customers asked for higher-end coffee cups, and we were instrumental in developing this," he said. "In our business, customers have particular needs that we have to fill."

The panelists responded to a question about private label by expressing varying opinions on their opportunities for further growth in that segment.

"Private label is quite large at Price Chopper," Golub said. "About 27% of our units are private label, with three tiers of products. We plan to further grow private label as a percent of sales."

Marsh said private label represents about 16% of his company's business, and that the ceiling would be about 20%.

Roeder said his company's private-label stats were similar to those of Price Chopper: Approximately 27% of the total business is private label, broken down into three tiers. Unlike Price Chopper, however, "we're not sure if we want to go higher on private label," Roeder added.

Stay up-to-date on the latest food retail news and trends
Subscribe to free eNewsletters from Supermarket News

You May Also Like