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The majority of U.S.-based retailers (77 percent) say they expect to increase their use of direct store delivery (DSD) or their use will remain the same in 2008, according to a study released Tuesday by the Grocery Manufacturers Association (GMA). This number represents an opportunity to drive sales growth, according to the study Powering Growth Through Direct Store Delivery, conducted by AMR Research and Clarkston Consulting.
"Direct store delivery improvements represent manufacturer-customer collaboration at its finest," said Stephen Sibert, GMA senior vice president of industry affairs. "This study indicates that both retailers and manufacturers are being rewarded for DSD innovations, from enhanced promotional effectiveness to increased brand and store loyalty."
Sales of DSD products account for 24 percent of unit sales and 52 percent of retail profits in the grocery channel, according to the study. Also, seven of the top ten largest grocery categories use DSD and these categories experienced sales growth of almost 15 percent from 2003-2007. Placing supplier representatives in store allows the DSD model to help ensure proper execution of trade promotions and contribute 25 percent of total store labor in the North American market.