“Tough conversations” are due to take place between suppliers and convenience wholesalers as lockdown ends, according to new research by the Advantage Group.
Speaking to betterRetailing, Advantage Group’s UK & Ireland general manager, Julia Pascu, explained how the Covid-19 crisis has changed these relationships and the impact on shop owners.
The survey data shows most suppliers believed their relationships with wholesalers and convenience operators had improved during the crisis. “In the same way the nation is united, we feel the industry is united as well,” one commented.
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Another explained the “aggressive dissatisfaction of orders not arriving or the switching off of promotional mechanics is not being met with the normal furore that we would get”.
According to Pascu, despite concerns of multiples being favoured in terms of availability, “convenience retailers and wholesalers have been happy with the level of support” from suppliers.
Though the results were mostly positive, some suppliers complained a minority of wholesalers and convenience operators had “put pressure on suppliers to supply more than their fair share of stock”, while “a lack of understanding of the challenges faced by suppliers” was also reported.
Pascu suggested the involvement of supermarkets in the supply of convenience stores may have also complicated the supply given to stores.
She said they had been criticised for “a lack of understanding of the specific issues in the convenience and wholesale channels – therefore, some of the decisions, like range and category decisions, may not have been the right decisions for the channel”.
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Asked about other impacts of these challenges on stores, Pascu said that new product development, range reviews and promotions had been suspended.
These newly improved relationships are to be further tested as retailers and wholesalers prepare to recoup higher operating costs and get ready for a discounter- and supermarket-led price battle.
The general manager said: “Commercially, relationships may have to be reset as every business has been impacted as result of the crisis.
“While some companies enjoyed increased sales and closer collaboration in the initial stages, they have also had to invest significant amounts of money on things like staff, protective equipment and new ways of working, so there may be some tough discussions taking place between the trading partners over the next couple of months.”