Fiona McLelland looks at how constant buyer turnover affects business
Suppliers are used to buyer churn. And the reasons for the phenomenon are extremely well documented. Retailers say it is a great way of helping the experience, skills and therefore, the careers of their buyers. But are retailers guilty of going too far? Is the constant turnover of buyers that beneficial?
Most of the big retailers admit it is a deliberate ploy to shake up buying departments in order to keep each category fresh, but they also agree that movement has to be controlled for it to be effective.
Asda, Tesco and Sainsbury all say that two years is the ideal time for a buyer to hold a certain position. But a straw poll conducted by The Grocer found that half of the buyers had moved category within 18 months, evidence that the revolving doors are spinning ever faster.
The poll found that 83% of the group believe buyer churn has a negative impact on business. Among the problems cited were constant fixture and product churn, and an inability to evaluate the previous season’s trade. “We lose expertise and information,” complains one buyer. “Churn is not only disruptive to the buyer-supplier relationship, but to stores and central operations.”
But most buyers also believe that the churn has its benefits, as long as there is enough time - and, again, two years is the ideal - to settle in and make a difference.
It’s no good shifting one buyer from one job to another unless he/she has had time to develop the category and add new skills, says Asda’s people director, David Smith. He carries out succession planning every six months, but wants each buyer to see the yearly cycle through twice.
“One thing that makes this business vibrant is the movement of people,” explains Smith. “Some people think a buyer should stay in one role for a long time to gain lots of experience, whereas I believe that there is more to gain by moving people on.”
But one supplier claims that Asda is guilty of excessive churn and says that his company is dealing with a new buyer every year. “It takes the first six months to get to grips with a job, so it’s very dangerous for a retailer to switch buyers too often,” he warns.
“But it is equally dangerous to be in a job for too long. Retailers on the continent don’t move enough and I deal with buyers who have been in their job for many years. As a result, they have lost their appetite for fresh ideas, and innovation suffers.” Another supplier is adamant that the constant churn is not only detrimental to manufacturers, but that retailers also suffer.
“I probably see a new buyer in a category every 12 to 18 months and it definitely has an effect on our business. We might be well into a project when a new buyer comes along and either wants to go through all the plans again or scrap the product altogether. Constant changes must drive retailers’ plans backwards, or at least slow down progress.”
When a new buyer comes in, an own-label supplier may not suffer as badly as a secondary or tertiary brand owner, he says. “There are contracts and some degree of loyalty with own label, but it’s easier for buyers to back out of agreements or demand better deals from the smaller brands. These brands are the easy target for the new buyer, who wants to impress by getting better terms, and will generally lose a lot of money at every change of buyer.”
A Sainsbury spokeswoman says that the supermarket is aware that buyer churn has an effect on suppliers. “We recognise that relationships with suppliers are key to success, so we are careful to ensure that buyers are moved at the right stage in their career and in their category’s development.”
But she says that churn is vital to keep the business moving forward, as well as to give buyers the motivation of promotion.
A buying manager at a grocery retailer adds: “As long as the churn is happening for the right reasons, it can be very positive.”
A typical buyer at Tesco will stay in one role for at least 18 months, says external communication head Jon Church, who adds that encouraging buyers to move helps share expertise and skills around the business.
But not all buying departments in the grocery world experience buyer churn, as one buyer for a wholesaler says: “I think the last time someone new came into our trading team was about three years ago. It gives us the benefit of stability and everyone in the team has an in-depth understanding of their categories. But there are definitely benefits for everyone in having some degree of buyer churn.”
Suppliers are used to buyer churn. And the reasons for the phenomenon are extremely well documented. Retailers say it is a great way of helping the experience, skills and therefore, the careers of their buyers. But are retailers guilty of going too far? Is the constant turnover of buyers that beneficial?
Most of the big retailers admit it is a deliberate ploy to shake up buying departments in order to keep each category fresh, but they also agree that movement has to be controlled for it to be effective.
Asda, Tesco and Sainsbury all say that two years is the ideal time for a buyer to hold a certain position. But a straw poll conducted by The Grocer found that half of the buyers had moved category within 18 months, evidence that the revolving doors are spinning ever faster.
The poll found that 83% of the group believe buyer churn has a negative impact on business. Among the problems cited were constant fixture and product churn, and an inability to evaluate the previous season’s trade. “We lose expertise and information,” complains one buyer. “Churn is not only disruptive to the buyer-supplier relationship, but to stores and central operations.”
But most buyers also believe that the churn has its benefits, as long as there is enough time - and, again, two years is the ideal - to settle in and make a difference.
It’s no good shifting one buyer from one job to another unless he/she has had time to develop the category and add new skills, says Asda’s people director, David Smith. He carries out succession planning every six months, but wants each buyer to see the yearly cycle through twice.
“One thing that makes this business vibrant is the movement of people,” explains Smith. “Some people think a buyer should stay in one role for a long time to gain lots of experience, whereas I believe that there is more to gain by moving people on.”
But one supplier claims that Asda is guilty of excessive churn and says that his company is dealing with a new buyer every year. “It takes the first six months to get to grips with a job, so it’s very dangerous for a retailer to switch buyers too often,” he warns.
“But it is equally dangerous to be in a job for too long. Retailers on the continent don’t move enough and I deal with buyers who have been in their job for many years. As a result, they have lost their appetite for fresh ideas, and innovation suffers.” Another supplier is adamant that the constant churn is not only detrimental to manufacturers, but that retailers also suffer.
“I probably see a new buyer in a category every 12 to 18 months and it definitely has an effect on our business. We might be well into a project when a new buyer comes along and either wants to go through all the plans again or scrap the product altogether. Constant changes must drive retailers’ plans backwards, or at least slow down progress.”
When a new buyer comes in, an own-label supplier may not suffer as badly as a secondary or tertiary brand owner, he says. “There are contracts and some degree of loyalty with own label, but it’s easier for buyers to back out of agreements or demand better deals from the smaller brands. These brands are the easy target for the new buyer, who wants to impress by getting better terms, and will generally lose a lot of money at every change of buyer.”
A Sainsbury spokeswoman says that the supermarket is aware that buyer churn has an effect on suppliers. “We recognise that relationships with suppliers are key to success, so we are careful to ensure that buyers are moved at the right stage in their career and in their category’s development.”
But she says that churn is vital to keep the business moving forward, as well as to give buyers the motivation of promotion.
A buying manager at a grocery retailer adds: “As long as the churn is happening for the right reasons, it can be very positive.”
A typical buyer at Tesco will stay in one role for at least 18 months, says external communication head Jon Church, who adds that encouraging buyers to move helps share expertise and skills around the business.
But not all buying departments in the grocery world experience buyer churn, as one buyer for a wholesaler says: “I think the last time someone new came into our trading team was about three years ago. It gives us the benefit of stability and everyone in the team has an in-depth understanding of their categories. But there are definitely benefits for everyone in having some degree of buyer churn.”
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