By James Atkinson
Suppliers that have decided the independent channel does not warrant its own dedicated sales resource are effectively capitulating to accept that their businesses will be driven by the chains, one independent retailer has suggested.
Porters Liquor general manager Giuseppe Minissale told TheShout that the reason suppliers have axed so many jobs this year is because the margins are no longer in their businesses.
“That’s because of the sheer dominance of the chains, proportionate to suppliers’ businesses,” he said.
He acknowledged that the independent channel is more costly to manage but said it is shortsighted for suppliers to decide it is not worth the expense.
“If you look at any other market around the world where there is dominance by four, five or six players, a group does start to develop its own niche and its own market, and starts to develop ways of beating their major competitor set,” he said.
“I believe that will happen in the Australian market, so I can see this being a short-term position.
“What it actually is going to create is an environment where banners and independents will ignore the suppliers’ wishes because the relationships are no longer there through the representative network,” Minissale said.
Today’s reps like robots, says banner boss
Another banner group boss bemoaned the lack of business acumen among the remaining reps that service the independent trade, with suppliers casting aside some of their most astute and experienced employees.
“I don’t want someone that has been trained into a robot from a super power supplier, or someone to take me out socially or tell me that the solution to retailing is that we should keep discounting my whole retail store to sell more volume, or tell me ‘that our research shows that price is not important’,” he said.
“I want practical, evidential, financial experience that can help grow our business every time they walk in my office and only then can we celebrate our wins.”
I’m happy with less rep calls
Speaking from an individual liquor retailer’s standpoint, Tony Ingpen, owner of Mt Evelyn Supa IGA in Victoria, told TheShout the level of support he receives from his banner group makes suppliers’ sales reps less relevant.
“I’m getting so much support now through my promotional program that there’s not as much for the rep to actually do, so I’m really happy with less calls from reps,” he said.
“Every time a rep comes to visit me it has cost $170. That $170 has got to sell a lot of stock.”
Ingpen said it is the “true out-on-your-own independents” that would be suffering the most from a lack of supplier support.
“They’re going to have to make some decisions; ‘is there going to be anyone to talk to at street level anymore? Or do I jump on board with someone that’s doing the negotiation for me in an office in Sydney and then retouching it for the Victorian market?’” he said.
“There’s a lot of retailers that are really trying to swim against where the tide’s taking them.”