Brian Moore reports
In a market of uncertainties – resulting from the global financial crisis and demand downturns in C&T categories – the only real certainty is that both suppliers and retailers need to generate an acceptable profit on resources put at risk in the C&T business.
Brands, shops and consumers are simply a means of achieving this goal. In general, these aims are more easily achieved by collaborating via a supplier-buyer interface than through a non-cooperative pursuit of profit at the other party’s expense. And, thankfully, given the relationship based nature of the C&T supplier-retailer partnership, this level of collaboration would be easier to achieve than with other categories, with appropriate use of relevant numbers helping the process.
The common goal is – or should be – expressed as Return On Capital Employed (ROCE) for each of the two C&T businesses. In the current climate ROCE needs to be at least 15% to preserve independence, continuity and autonomy at all levels in the organisation. Most retailers are currently achieving 8% or less, hence the current pressures on the C&T supplier-retailer relationship.
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