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Mid-sized retailers' profit margins continue to shrink under increased pressure and competition from big-box retailers, according to a new report by Phoenix-based e-sourcing solutions company Intesource.
According to “Battling with the Big-Boxes: Three Strategies for Mid-Sized Retailers to Stay Competitive and Improve Profits,” grocery stores accounted for two-thirds of U.S. grocery purchases in 2000, yet barely claim half of the North American market share. The competition comes from large, global retailers that leverage immense purchasing power to dictate market terms, and make it difficult for smaller retailers to compete on price and supply.
"Lacking the purchasing power of a Wal-Mart or Target, smaller retailers are exposed to volatile prices, rising costs and shrinking consumer incomes," said Brian Miller, VP of services at Intesource. "To stay competitive in this market, retailers must lean on their supply chains for growth and cost-saving opportunities."
The research study outlines sourcing strategies to unlock new savings, improve margins, and drive sales, including:
- Exploring new, innovative sources of supply that differentiate retail brands and introduce customers to new and exciting products.
- Challenging suppliers to provide more value and better contractual terms– even when you are satisfied with current supplier relationships.
- Collaborating, aggregating, and being creative to build stronger supplier partnerships that drive savings and reduce risk.
The full report is available for free on the Intesource website.