With new trends emerging in the buying behaviour of today’s consumers, and shoppers becoming increasingly gadget 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.