Suppliers, two of your major accounts are simultaneously driving a strategic reset – that’s not a coincidence. It’s a commercial pattern which requires a commercial response, not a category presentation.
Asda and Morrisons are on the catwalk right now displaying their rich opportunities for investment, with Allan Leighton’s “bay by bay” range reset for Asda, and now Morrisons Magic 2.0. Two businesses, with perhaps two different circumstances. However, both with a heavy debt burden, both fighting to reclaim ground lost to Aldi and Lidl, and both with the same familiar playbook.
The expectations put on suppliers
The classic reset playbook runs like this. First, the vision: bold, directional language, normally in the annual supplier conference, about what the business is becoming. Then the invitation: “come on this journey with us as a partner”. Then, the range reduction, promotional investment requests and information sharing requirements. The language is warm but the commercial reality is not. Supplier partnership is the frame, but supplier investment is the mechanism. These are not the same thing.
Suppliers who treat these as standalone account problems will lose out. Do not walk into Morrisons having failed to connect it to Asda, or to the broader structural moment the discounters have created. Your main friend here is that they are bidding for your dollars.
A retailer’s turnaround plan is a burning platform for the retailer, not the supplier. The reset exists to improve the retailer’s economics, sharpen its competitive position, and reduce its cost base. It clearly helps to dress the wolf in sheep’s clothing.
That does not mean engagement is wrong though. Both retailers are still too big to ignore. It means this competitive perspective should be the basis of your engagement. When the invitation to “partner in the reset” arrives for your category, the question to ask is not “what does the retailer need?” or “how can I point out the flaws in their strategy?” It is “what am I willing to give, and what do I need in return?” Normally taking time in a negotiation works for you. In this one it may do the opposite. Very often the first supplier in, by category, can gain big tactical wins putting their footprint straight onto a disproportionate share of range slots.
Structural resets reveal what the retailer actually values, versus what it says it values. Suppliers should map their exposure across both Asda and Morrisons simultaneously to understand where range overlap creates vulnerability and volume risk. Capitalise on short term in both, but prioritise strategically the retailer with the highest likelihood of success – that’s Morrisons in my view, because although both have some top-line momentum, no one can see the bottom-line way out for Asda.
An insightful category review or a list of promotional ideas answers the wrong question. They are not running a partnership programme; they are fighting off a structural competitive threat with supplier money. This time though, they are competing with each other, so leverage that in every meeting between now and the end of the year.
David Sables is CEO of Sentinel Management Consultants
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