Branded and own-label FMCG suppliers need to urgently prepare for the prospect of retailer delisting by identifying the steps they need to take to defend themselves against delisting and put themselves in a powerful position to positively argue their case.
That’s the message in a new free White Paper – “Get Ready For Reset – How to protect your products on supermarket shelves” – published this week by category and shopper management specialist, Bridgethorne.
The publication of the White Paper follows recent reports that Tesco is planning to reduce the number of suppliers it works with as part of the next phase of its Project Reset, which aimed to streamline its product range. Bridgethorne predicts that this could set a pattern to be mirrored by other retailers across the grocery sector.
“Retailers are seeking simplicity in operations, though the implications for suppliers who don’t address these issues could be particularly serious. It isn’t about winning or losing 5 or 10% of their business, it could be about losing up to 100% of their business. It’s that serious,” explains Andrew Cole, joint managing director, Bridgethorne.
“To defend their position, maintain listings and increase distribution across multiple retailers, suppliers need to think strategically and that means being able to demonstrate an informed consumer need, a clear understanding of the retailer’s shoppers and a consequent category opportunity.”
Suppliers have a choice, Cole adds, they can wait for the hammer to fall or they can begin to plan and prepare their response now.
“Suppliers need to defend their brand or product range by demonstrating a clear understanding of the category value that it adds. This requires use of available market performance data and consequent insight. They need consider how they would pre-empt the threat of a retailer delisting and put themselves in the best possible position to survive any cull. In effect, this requires them to conduct a proactive range review on the category, assessing for themselves what might be at risk, what steps they need to put in place to mitigate those risks and how they could begin to protect their distribution.
Preparation now for the impending reset programmes from Tesco and potentially other retailers is essential, continues Cole.
“This situation demands a clear understanding of the retailer’s range review process; a complete assessment of the category in which your products function; the identification of category growth opportunities for both your own business and the retailer, and quantified recommendations on range, distribution and space. This all needs to be supported by a platform of evidence to help you defend existing listings as well as sell in new products. That means preparing credible arguments to support the recommendations, backed up by data and insights.”
Bridgethorne helps supplier and retailer clients drive profitable growth and offers best practice in retail range reviews.