A response by wholesalers and independent retailers to the growth of the multiples (e.g. Wal-Mart) has led to the formation of 'symbol', 'voluntary' or 'affiliation' groups. Within this form of contractual chain, a group name is utilised and:
- The retailers normally are required to obtain a specified proportion of their goods from the group wholesalers.
- The basis of of the contract is that the retailer sacrifices some freedom of action for the sake of big retailer disciplines that the sponsoring wholesaler seeks to provide.
- Member retailers normally pay a levy towards the costs of the services that the group provides.
- Loans and financial support to develop or to extend/refurbish units.
- Group buying power normally leads to better prices than an independent could obtain.
- Benefits are gained through own-brand products and the group image.
- Turnover is increased through lower prices, group marketing expertise, promotions, etc.
- Selling costs as a percentage of turnover are therefore reduced.
- Labour productivity is improved through higher turnover and better administrative systems.
- Space productivity improves through advice on space allocations, merchandising and display.
- Profitability and return on capital is improved.
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