Proposed Today's/Landmark Merger Will Benefit Retailers
Why do buying groups exist? Strength in numbers. Their purpose is to provide the collective scale and leverage for their wholesale members. Using this scale they have the size to negotiate with suppliers on behalf of their members and so secure better terms and additional investments. More than each member can individually. They also provide the level of expertise to develop store fascia’s, retail packages, own label ranges and market intelligence that would be beyond their wholesale members individually.
Now more than ever there is the need for strength in numbers and a compelling argument for the two largest buying groups: Today’s and Landmark to merge into one.
- Suppliers are continually seeking out ways to reduce their cost to serve.
- They need to know that for every pound invested, the highest amount possible is reaching its ultimate destination – the consumer.
- One larger buying group means one central office. This immediately offers one point of negotiation: improves efficiency, reduces cost & complexity for all.
- Concentrated buying power enables better terms and supplier investment.
- Simplified distribution will yield benefits throughout the value chain.
- One promotional plan enables efficiency and improves the level of execution.
- One store fascia package increases critical mass and consumer visibility. This in turn enables simplicity & consistency.
- One own label brand increases awareness and unlocks purchasing power across the categories. Improved buying power should enable more product development & innovation.
- One larger buying group will be in a stronger position to develop and negotiate the range of added value services such as merchandising, marketing, merchant services, point of sale material, shelving systems, refrigeration et al.
Assuming that the merger triggers all the efficiencies set out above, the benefits for retailers should be considerable and flow through to better value all round: sharper pricing, better and wider range services.
Of course there are arguments against, such as lack of variety and choice. My view is that the upside far outweighs the downside. Please let me know your views by joining the discussion.
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