FGP WILL GAIN IRON GRIP

One third of the grocery industry is now actively engaged in some form of factory gate pricing, suggests an IGD survey carried out exclusively for The Grocer.

While volumes remain low, the survey found suppliers expected their involvement to rise over the next six months Â- albeit most said it would increase only a little.

Of those who have worked on a factory gate pricing initiative, more than 70% told IGD their experience of the process was generally favourable.

That will be good news for Tesco and Sainsbury. They are leading efforts to introduce factory gate pricing, which aims to exclude transportation costs from product prices to develop optimal supply chain solutions.

Anecdotal evidence from suppliers suggests momentum behind the drive to implement factory gate pricing appears to have slowed recently. But none of those quizzed by IGD thought the concept would fail to gain the critical mass needed to make it a success. And most said factory gate pricing would become fully integrated into retailer and manufacturer operations.

Retailers that have implemented factory gate pricing say they have experienced no operational issues, while hauliers and manufacturers say there have been problems although nothing serious.

Further details can be found in this weekÂ’s copy of The Grocer magazine.