October 01, 2014 Opinion piece
Shopper purchase behaviour is moving toward the ‘less, more often’ model that suits convenience retailers and the wholesale supply chain that services them.
In recent years the grocery multiples have driven growth in the sector. Their advantage is clear – large, highly-developed businesses with strong brands that consumers trust, and supply chains that benefit from years of optimisation.
Yet we believe it is possible to push back against this pressure, and see opportunities for convenience retailers to capitalise on their strengths – such as being at the heart of communities, offering ranges tailored to their local customer base, a focus on customer service etc. Key to this is an agile and responsive wholesale supply chain, capable of meeting the demand for consistently high levels of availability on key categories such as fresh, chilled and foodservice - whilst offering exceptional customer service and added value. In this way the industry can create tangible competitive advantage and a collaborative approach to meeting consumers growing demands for convenience, quality and choice.
A roadmap for industry
This requires the development of a roadmap for industry – where we want to go and how we are going to get there. We are working with the sector to identify potential opportunities for all businesses to optimise trading performance and increase efficiencies. Through this work we are aiming to deliver efficiency improvements that will step-change the wholesale supply chain and support the projected growth in convenience retail, whilst realising universal cost savings similar to those already enjoyed by the grocery multiples.
So how is the roadmap being put together?
It is being produced with input from key industry stakeholders – independent and multiple retailers, suppliers and wholesalers. This allows us to identify best practices that can be applied to your business and the industry as a whole – offering the potential to deliver significant competitive improvements across the end to end convenience supply chain.
It’s not too late to have your say. We are still actively inviting input from across the industry to help us fully understand where the productivity shortfalls are apparent, so that we can accurately identify the areas where standardisation can benefit both specific businesses and the sector as a whole.
We believe all involved in the wholesale / convenience supply chain can work together to reduce costs and waste in the system, and increase the number of mutually-agreed processes and more standard ways of working that are essential to the efficient movement of goods.
Rising to the challenge
There is no question that wholesale businesses face significant challenges. But a common thread we find in discussions with our members is that evolving and improving operational efficiencies in convenience is both possible and desirable.
We are already building up a clear picture of what the sector requires in order to achieve this. Now we are looking to identify existing shared platforms and how best practices can be applied for the benefit of all stakeholders.
The potential savings for the sector are vast. To give an indication of the kinds of difference standardisation can make – in 2013 the cost savings for the retail / CPG industries due to the deployment of GS1 standards was estimated to be £10.9bn.
Reducing costs and enabling more efficient working processes throughout the entire supply chain is a challenge, but one that we believe wholesale businesses are ready to rise to.
Find out more
If you would like more information on our wholesale / convenience initiative, contact Gavin Albrow, Industry Development Manager – Wholesale & Convenience (+44 (0)207 092 3537 / gavin.albrow@gs1uk.org).