We all know of categories that are dogged by deep discounting that serves one purpose: educating shoppers to buy only on price. But who is to blame for this sorry state of affairs? Is it the retailer, who is pushing for deals that will excite consumers? Or is it, in truth, the fault of those suppliers who agree to anything as they desperately look to maintain market share, hit sales targets and so keep factories running at full capacity?
That was one of the themes to come out of a seminar we hosted this week to explore the issues around promotions and, more generally, how suppliers can manage their trade investment budgets effectively. All very pertinent in the week that Asda generated some negative headlines for apparently biffing suppliers.
And the answer to our question? Well, I think both retailers and suppliers were felt to be equally to blame for driving value out of categories - with retailers at fault for running inappropriate promotions and, you've guessed it, suppliers for letting them get away with it.
We are not daft. Everybody realises that saying 'no' in today's trading climate is not easy. But the message from our expert speakers was pretty clear: if you have the right leadership in your business, a clear promotional strategy in place and the necessary data at your fingertips to defend your position, then you can find ways of working with your customers to mutual benefit.
More than that, we heard how most suppliers could very quickly axe up to 21% of their promotional calendar without compromising either their brands or their relationships with retailers. Quite staggering. But what's needed is a genuine desire to change and the wherewithal to actually make that change happen.
Interestingly, suppliers were also urged not to overlook the softer things in their trading lives, such as the way they manage their accounts or their strategic planning. Those that ignore these factors, perhaps as they focus all their energies on tougher issues such as improving their commercial terms, were often the ones that ended up in a box where they found themselves being squeezed for cash and margin. With competition intensifying, input costs rocketing and deflation remaining a constant headache, the last place you want to find yourself is living in that particular box. It's a hard place to get out of. Sadly, some suppliers never do.
That was one of the themes to come out of a seminar we hosted this week to explore the issues around promotions and, more generally, how suppliers can manage their trade investment budgets effectively. All very pertinent in the week that Asda generated some negative headlines for apparently biffing suppliers.
And the answer to our question? Well, I think both retailers and suppliers were felt to be equally to blame for driving value out of categories - with retailers at fault for running inappropriate promotions and, you've guessed it, suppliers for letting them get away with it.
We are not daft. Everybody realises that saying 'no' in today's trading climate is not easy. But the message from our expert speakers was pretty clear: if you have the right leadership in your business, a clear promotional strategy in place and the necessary data at your fingertips to defend your position, then you can find ways of working with your customers to mutual benefit.
More than that, we heard how most suppliers could very quickly axe up to 21% of their promotional calendar without compromising either their brands or their relationships with retailers. Quite staggering. But what's needed is a genuine desire to change and the wherewithal to actually make that change happen.
Interestingly, suppliers were also urged not to overlook the softer things in their trading lives, such as the way they manage their accounts or their strategic planning. Those that ignore these factors, perhaps as they focus all their energies on tougher issues such as improving their commercial terms, were often the ones that ended up in a box where they found themselves being squeezed for cash and margin. With competition intensifying, input costs rocketing and deflation remaining a constant headache, the last place you want to find yourself is living in that particular box. It's a hard place to get out of. Sadly, some suppliers never do.
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