Retail Partners Playing Hardball with Brands

Ad Age says that brands are under pressure from retailers.

There are a number of factors- commodity price decreases, increases in strength of private label and the economy. Commodity prices have declined, thus boosting the manufacturers margins, but since a downward adjustment has not been given to retailers, they are feeling left out. I feel that private label is act based on price sensitivity as well as some of the shelf space marketing done by the retailers.

From experience, I know that retailers are always looking for growth opportunities and increasingly this has led to assortment. From my understanding of the concept, assortment relates to the actual availability of brands and products in a store by store basis. Retailers use data to make their decisions, like ACNielsen, PRISM clusters, etc. to help them in the decision making process.

I assume that looking at certain brands as Walmart has done recently, has led to a lot of the herd thinning as it comes to brands.

Sounds like it is time for the Brands to kick up the innovation to give a major reason for consumers to spend. Also it seems that some price cutting for retail partners may also be in order.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s