Laying it out on the table

Article Abstract:

Negotiations between supermarkets and food marketers had always been secret, with each side hoping it made a better deal than the competition. This year Procter & Gamble made trade allowances a public matter and adopted an Everyday Low Pricing policy. Lately retailers had forged an advantage, with suppliers having to buy shelf space with trade promotions. Now warehouse clubs are taking market share from supermarkets, and supermarkets are increasing private labels because of a perceived lack of new brands from manufacturers. New strategies for both sides are discussed.

FOOD AND KINDRED PRODUCTS, Purchasing, Grocery industry, Grocery stores, Cover Story, Contracts, Brand name products, Brand names

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Threat to $36 billion trade promo bounty: retailer dogfight triggered by Procter & Gamble

Article Abstract:

Proctor and Gamble's (P&G) decision to slash its trade promotion budget and institute an every day low pricing strategy (EDLP) in its place could influence the promotion and advertising budgets of other marketers for the next decade. Retailers, however, are furious since trade promotion allowances account for at least 45% of their profits. It remains to be seen whether they are bold enough to drop P&G brands the way Safeway has. If they elect not to, they could still sabotage manufacturers who adopt EDLP by providing their competitors with promotional support.

MISCELLANEOUS RETAIL, Finance, Consumer goods industry, PG

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