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HOME > Current and Future Trends > Supermarket Buying Practices > Increasing Specialization the Norm | ||||||||||||||
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In recent years, particularly among the larger UK supermarkets there has been a move towards reducing the pool of suppliers. This strategy of giving selected suppliers more business (as category managers) means that retailers have greater influence in the supply chain, as well as reducing costs through economies of scale. It also raises the stakes for suppliers and encourages greater co-operation between suppliers and distributors, out of the desire to retain business or gain new business among retailers. It is likely that this trend towards greater consolidation (and integration) of the supply chain will be a major feature in the medium term. Category management is a principal driver in increasing specialization. This requires that 'Suppliers and retailers work in partnership to satisfy consumer demand.' For suppliers, this means changing from a grower focus (selling what the growers produce) to a consumer focus (making sure growers offer what the consumer wants). Categories in this context are groups of products e.g. citrus, brassicae, legumes, etc. The key elements of category management are:
The implications of this trend are that:
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Natural
Resources Institute 2003
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