Five Tips to Improve Grocer-Supplier Relationships

Five Steps to Better Store Brand-Supplier Relationships

Denis Storey
January 22, 2021

Supplier Management: Automate and digitize your supplier and sourcing programs for real-time insight and easy audits.

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Manage Suppliers and Source Like a Pro

For many companies, finding, qualifying, and managing suppliers, items, and ingredients are manual and disjointed processes. Documents are filed away, and the data they contain can’t be used for insight or easily accessed for an audit. TraceGains Supplier Management can help by digitizing and automating your supplier and sourcing programs.

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Grocery stores have always been essential, but in 2020 they became pivotal for Americans to stay healthy and nourished at home. These critical businesses dealt with a rollercoaster ride of consumer demand, supply chain disruption, and a heightened focus on operational and product safety.

 

Many analysts expect more of the same ups and downs in 2021, and some trends will carry over into the new year, like more shoppers buying online, more home dining, and store brands dominating sales.

 

Consumers have flocked to private label brands during the pandemic, and that trend continues to grow. For retailers, the lure of private label brands remains irresistible – and profitable. These products fill market niches, build consumer loyalty, and boast a lower-cost structure. But any strategy that places greater reliance on private brands must also address a host of supply chain challenges.

Private label brands require air-tight regulatory compliance programs and quality-first food safety strategies. In today's social media age, all it takes is one incident with a single product to tarnish the brand's reputation.

Fortunately, with a customized private label and food safety program, retailers can take steps to prevent private label and food safety issues before they occur. This process begins with a strong supplier relationship management program. And with store brands, if there are quality or safety issues, you don't get to send it back to the supplier and wash your hands of the problem. Your team must manage the consequences.

 

1. Cultivate Relationships

Both retailers and suppliers bear the responsibility of ensuring products are safe. A brand’s reputation and bottom line can suffer from product-related quality and safety issues, so selecting the right suppliers is paramount. Chasing low-price materials can end up costing retailers more in the long run, leaving them vulnerable to inferior products, supply chain risk, and fraud. Soliciting competing bids remains a prudent business strategy, but it shouldn’t dictate the final decision. Store brand owners should seek dependable suppliers that share common business values. Healthy, long-term relationships bear rewards, like preferred pricing and better market intelligence access.

 

2. Nurture Communication   

Supplier relationships involve the constant exchange of information, so establishing effective lines of communication is crucial. Establishing clear expectations for supplier performance, documentation procedures, and follow-ups on corrective actions ensures suppliers comply with company standards and government regulations.

 

3. Collaborate, Don’t Negotiate

A better working relationship with suppliers also helps store brand owners deliver the best shopping experience for customers, keeps costs manageable, and improves operational efficiencies. Retailers can get there faster by abandoning manual and resource-intensive communications. Digitizing documentation and communication allows both parties to share information quickly and easily, making collaboration seamless. It also empowers everyone to operate proactively, rather than wasting time and resources with a less-efficient reactive approach.

 

4. Evaluate Performance

As supplier relationships evolve, store brand owners must continuously evaluate supplier performance, including metrics gauging product quality and delivery. Effective partners share that information, elicit feedback, and make adjustments as needed. Formative evaluation doesn’t merely shore up the retailer’s bottom line; it also leads to more efficient operations. It’s equally important to communicate a job well done and reinforce good performance.

 

5. Embrace Technology

Store brand owners’ ability to manage supply chain risk often comes down to how they track the information they receive. Manual processes are confusing and time-consuming, and they can’t keep up with the flood of regulatory compliance documents and information needed to run an effective program. We can help.

 

TraceGains Supplier Management streamlines vendor qualification and sourcing by collecting and digitizing supplier documents, extracting the relevant data, and arranging it into performance dashboards and reports to provide real-time business insight. Click here to see how Supplier Management can help improve the store brand-supplier relationship.