Kantar Retail 2013 PoweRanking reveals state of retailer-manufacturer relationships

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Retailer/supplier relationships exposed

Retailer/supplier relationships exposed

Wal-Mart continues to be seen as the top retailer in the United States and China by manufacturing trading partners in both countries, according to Kantar Retail’s latest PoweRanking.

However, pure-play online retailers are starting to make their presence felt in both markets as they challenge the dominance of the big traditional bricks-and-mortar companies.

PoweRanking benchmarks how trading partners view each other in the most important areas of the manufacturer-retailer relationship, with manufacturers asked open-ended questions about retailers and vice versa.

Although these two markets are at very different stages of market evolution, Wal-Mart continued to top the ‘best of the best’ composite section of the report, driven by the strength of its business fundamentals and its unmatched supply chain, said researchers.

However, this was the first year that Amazon entered the top 10 of retailers in America as manufacturers were impressed by its enhanced online shopping experience.

In China, no online retailer made the top 10 but local company Yihaodian.com was ranked seventh in the list of companies that manufacturers expect to be ‘Power Retailers’ in five years’ time.

On the manufacturer side, Procter & Gamble and Unilever hold the number one and two spots in the overall composite in both reports and are strong contenders across many of the PoweRanking metrics.

These companies are viewed as highly strategic, organised, offer valuable brands in both markets, and engage in better consumer insights and category leadership than their competitors, said Kantar Media.

In the US, the report points to a more constant stormy environment as retailers overlap in geographies and offerings and as shoppers have the opportunity to buy more products anytime, anywhere. 

Retailer participants in the study consistently highlighted leading manufacturer partners who act as a beacon, providing a short-term plan and a longer-term vision for growth.

Ted Riedel, VP at Kantar Retail Americas, said: “We are seeing companies like Agro Farma – the company behind Chobani Yogurt – are capitalising on the trend for Greek yogurt and they’ve really made a great business model. Red Bull is moving up. And some classics like Hershey’s and Mars have made some significant moves in the last year. These companies are investing in quantitative and qualitative research.”

In China, however, a slowdown in growth has opened the way for local retailers to improve their standings as the big global players took a step back to revisit their strategies.

Wal-Mart was pushed by Chinese retailer RT-Mart in the composite ranking of the report with CRE and Yonghui also faring well.

Christophe Meuter, Kantar Retail’s managing director North Asia, said: “Chinese retailers have spent the last few years learning from their global competitors. As growth in China has slowed, the global retailers have eased off while they go back to basics in their strategies, and the Chinese companies have taken advantage of that.

“China is an increasingly complex environment, with different regions and cities having distinct cultural differences and many are at different stages of economic development. Those companies that are able to adapt to those nuances will be successful.”