Suppliers' trading terms "punish independents"

Independent liquor retailers have questioned why suppliers are not doing more to help them compete against Coles and Woolworths, with close to 60 per cent of TheShout readers in a recent poll naming the chains as the biggest concern for their business in 2013.

One retailer told TheShout he was "gobsmacked" that in spite of the difficult economic conditions currently facing the industry, the vast majority of readers still saw the chains as their biggest concern, as compared with just 15 per cent of readers who nominated economic worries.

"I think it might be the inability of suppliers to be flexible with independents on trading terms that is forcing independents to compete head-to-head rather than take advantage of local situations," he said.

"Suppliers are demanding range carries, saying that this is what the chains do, but independents are not chains and should not be if they want to survive."

He said independent banner groups are being forced to range products that are not viable because the suppliers want them to be like the chains.

"They need to be more flexible for the benefit of the retailer and as a result themselves," he said.

"If you speak to any supplier, none of them like Coles and Woolies being dominant, but they don't do a great deal to stop them being dominant."

His comments echoed those of Liquor Barons general manager Chris O'Brien, who recently attributed his WA banner group's strong financial performance to its strategy of customising product offerings to suit each individual store.

He called for suppliers to "'walk the walk' and not just 'talk the talk'" on trading terms.

"Suppliers, particularly the big guys, continually tell us that independents must differentiate," O'Brien told National Liquor News in January.

"In my view, the majority of existing trading terms actually penalise groups for attempting to differentiate."

"Transparency is fine, but flexibility in how we achieve a number is more important," O'Brien said.

Source: The Shout, 8 April 2013