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Road Map for Profit


With new  trends  emerging in the buying behaviour of today’s  consumers, and shoppers  becoming increasingly savvy. They are being bombarded with  exciting  offers through  all means of communication by  leading retailers of Modern Trade keen to grab their wallet share in the best possible ways.

It’s time  for all grocers to look for new ways  of driving sales and paving their road  to  profit. The scope for increasing  the selling price of most skus in today’s environment is almost nil due to better awareness. A possible way is to negotiate better on the sourcing price  with brand owners, vendors, companies, and manufacturers  in case of food  brands and efficient supply chain management. In case of  basic commodities  under  Fresh and Dry groceries, grocers should resort to smart buying and taking positions  for select commodities at harvest times or through imports.

While most brands seem to be willing to offer better discounts, margins  and promotions to modern retailers in lieu of  tactical  visual displays, sharing of consumer data, and branding  opportunities in high footfall areas of the stores,  many are still reluctant to give better discounts to avoid competition or price cut  in  the local market.  In many cases,  acceptance of  sales budgets from brands by merchandising teams of retail chains has also helped them earn  special promotional budgets for the extra support extended to the brands during certain periods.

Better margins in commodities  (the key footfall drivers) is possible mainly through smart buying  from the origins or growing areas during harvesting period,  and by  taking position for the  select commodities after factoring in all trends  of demand and supply, besides the international scenario. Government notifications  issued from time to time regarding storage limits of various commodities area-wise and export policies, also play an important role for taking decisions regarding advance buying and storage of the same.

Building  an efficient  and dependable supply chain set up right  from  the farm gate and mandis  to the selling areas  is critical. As a matter of fact, I have considerable expertise  in sourcing of commodities and brands while building merchandise assortment for stores. I have seen better margins in these categories  due to  calculated and timely decisions while  buying/taking position of key articles under the Food  Business.  Demand from stores need to be correctly assessed while making purchases so as to avoid shortage or excess stock during the consumption cycle.