A major piece of research by International Private Label Consult (IPLC) has found that business relationships in the private-label sector tend to be very one-sided, in the favour of retailers, however, in the discount channel, there seems to be more balance between retailers and suppliers.
The study, Driving Private-Label Growth through Collaboration, found that while the market for private-label products continues to grow throughout Europe, at the same time, we see the concentration of retail-food market share move into a few hands.
'This has created a market where a few powerful buyers interface with many suppliers,' the authors note.
About The Study
The study interviewed 113 senior managers of private-label manufacturers in 16 different European countries over the first two months of 2017.
As it explains, for private-label manufacturers, 'a contract to supply a retailer may represent a large proportion of their business, whilst one contract for a retailer will represent only a small fraction of their overall business, potentially creating a very one-sided relationship.'
Good Practice
Where the report did uncover good practice, however, was underpinned by an open trading relationship that focused on building categories in a collaborative way. This, in turn, creates a willingness for suppliers to 'invest in the long term', rather than focus their time on 'tendering and spreadsheet buying'.
Founded in 2003, and with offices in the Netherlands, Germany, the United Kingdom, France and Belgium, IPLC is a boutique consulting firm specialising in strategic consultancy services and project management support to suppliers and retailers.
To obtain a copy of the report, visit the IPLC website, www.iplc-europe.com.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
