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Traditional grocers make up half the top 10 retailers in the 14th annual PoweRanking® study by Kantar Retail, which highlights manufacturers and retailers that have performed best in the eyes of their trading partners.
The 2010 report, “Superior Performance in the New Normal,” recognizes retailers and manufacturers that have excelled in forming strong relationships in the “New Normal” environment.
“In this economy, it’s not just a frugal environment – it’s more of a prioritization environment,” said Virginia Valkenburgh, SVP of Kantar Retail Americas Inc. While frugal consumers are concerned just with price, those who prioritize look for products that differentiate themselves “to get to the top of their priority list,” explained Valkenburgh, noting that the insights contained within the PoweRanking study underscores the evolving collaborative strides being made between leading manufacturers and retailers.
A closer look at this year’s PoweRanking results finds Walmart continuing its reign in the No. 1 spot with other retail leaders – including Kroger and Target – hot on its trail. While Kroger and Target posted stronger gains in the annual benchmarking study, both retailers maintained the No. 2 and 3 ranks, respectively.
“Kroger has continued to increase over the years,” explained Valkenburgh, noting that the Cincinnati-based chain has “really organized to take advantage of their insights to execution.” Target, meanwhile, was recognized for its consistent strategy and collaboration while concurrently improving its fresh-food initiatives. “Food is playing a bigger part of [Target’s] stores,” Valkenburgh said.
Among the other Top 5 retail standouts in this year’s PoweRankings report, Costco remained at No. 4, while fifth-place Wegmans surpassed Publix. H-E-B and Safeway ranked seventh and eighth, respectively, while drug retailers CVS and Walgreens increased in performance thanks in large part to their shopper strategies.
“In this economic environment, value is the new hallmark,” affirmed Ken Harris, Kantar CEO. “The retailers that improved in the PoweRanking this year were noted for offering value – Target for its relevant programs and CVS and Walgreens for its smaller store positioning.”
Ranking criteria for retailers include company strategy, innovative merchandising, store branding, supply chain management and category management.
Among manufacturers, Procter & Gamble maintained its No. 1 position in 2010, despite a slight decrease in its PoweRanking composite score. Kraft held steady at No. 2, as its overall score remained unchanged. General Mills moved up to No. 3, surpassing PepsiCo, which took the No. 4 rank. Unilever had the largest point increase of 5.1, which propelled it from sixth to fifth, switching places with Nestle. Campbell’s moved back up into the top 10.
Helping Unilever close the gap is the company’s creation of a “center of excellence” that combines its category management and innovation functions, Valkenburgh explained. “With all that tied together, they’ve really streamlined their insights to execution,” she noted.
Harris added: “This year’s PoweRanking demonstrates how vehicles and structures for continuous, proactive communication – both internally and with trading partners – drive superior performance. Unilever is an example of a leader who excelled at communication in supply chain and shopper insights and solutions.”
Findings for the study are derived from customized questionnaires developed for retailers and wholesalers in food, drug, mass merchandiser and convenience channels and manufacturers in food, general merchandise and HBC. These questionnaires were mailed each spring from 1997 to 2010 to personnel at all levels of management with the assurance of total confidentiality. To provide trended information over time, the PoweRanking measures are calculated on a rolling two-year basis.
The benchmarking study, published annually since 1997, gathers information on best practices from manufacturers, retailers and wholesalers, with the trading partners ranking each other on strategic and business fundamentals. The purpose of the study is to identify those manufacturers and retailers who have been recognized by their trading partners as best in class and provide insight into what makes them the best.
This year’s study highlights drivers for success in the changed economic environment. Kantar Retail points to the ability to execute as the tipping point – with the strategy for execution driven by insights and analytics. The study gives examples of leading retailers and manufacturers that have progressed from the “so what” (insights) to the “now what” (execution). The report points to collaboration as the continued foundation for success along with simplicity, consistency, follow through, creativity and involvement.
The report points to three drivers of success when moving from the “so what” to the “now what”:
- Insights Based: Initiatives are relevant and delivered via multiple levels
- Analytically Driven: Includes shopper-based facts identified by purchase behaviors
- Executionally Focused: Recognizes that the store is the critical point of contact and customization is the key going forward
“Insights to action is crucial,” Harris said. “Once strategies are aligned, execution is everything. All elements must be in place at retail to positively influence the shopper to purchase.”
Kantar Retail is WPP’s recently formed retail insight and consulting business. As of Jan. 1, 2010, Cannondale Associates, Glendinning, Retail Forward and MVI officially became Kantar Retail. In addition to the Trade Promotion Spending and Merchandising study, Kantar Retail publishes other industry benchmarking studies including PoweRanking, category management/consumer marketing at retail (CMAR) and FoodservicElite.