How is this playing in crunch-time? The demonising of Tesco has been unproductive, I’m told. Tesco did not get to where it’s got to by worrying, one independent told me. So how did it get to where it’s got?
Well, Tesco works on margins of 6% against Sainbury’s 3%, to compare apples with apples. Tesco knows its customers and what they want to buy. What’s not to like about the basics of maximising margin and understanding customers – basics on which the first-ever corner shop was opened?
On the other hand, wholesalers must worry about Tesco. But once upon a time egocentric wholesalers with bad habits ring-fenced their own profit first to let the retailer take the hindmost. That’s why some wholesalers went bust, taking as many retailers down with them as were straight victims of giant multiple competition.
In the recession of the early 90s some wholesalers increased their minimum drops to retailers at a stroke, rather than implement new ideas. The rug was pulled.
That was then. There has since been a marked change in wholesalers’ conceptual thinking. Now retailer-friendly wholesalers work backwards from the margin the retailer needs. If you feel yours does not, complain. Nowadays, wholesalers desperately need your playback – another change.
But every silver lining has a cloud. Apprehensive retailers are saying that crunch-cutbacks in wholesaler marketing people and resource are wrong. They want more ‘marketing’, not less.