Skip to main content

More supply chain breaking news

Last week's announcement by Wal-Mart that it had set up a partnership with Li & Fung is big news. Perhaps not for UK corner shops today. But read on and think how this deal could make Asda stronger over the next five years.

Li & Fung started out as a company that sourced products in China for wholesalers and distributors. It then moved into distribution and beyond. For example, today it runs shops in south east Asia for brands like Calvin Klein and Gant. It provides marketing, logistics and manufacturing services.

"As we do not own any brands, we devote all our resources and efforts to supporting our clients," it says on its website.

Now Wal-Mart seems to agree, saying that it will save between $4bn to $12bn on purchasing over the next five years. That is a lot of extra profit...or support to shoppers in the form of lower prices.

The challenge is for UK wholesale suppliers of corner shops to come up with something similar. Local retailers need to pay attention to their announcements and switch to the supplier that will keep their business moving forward.
Labels:

Comments

  1. Unknown4 February 2010 at 21:03

    Totally agree. The small retailers are being squeezed out of the market. Last week Asda ran a promotion where they were selling Mr Muscle Kitchen/Bathroom/Window cleaners 2 for £1. Now as a retailer it costs me 89p from the cheapest wholesaler. How can we compete with thier buying power!!!

    ReplyDelete

Post a Comment

Popular posts from this blog

Digital disruption in the UK wholesale space

“Twenty years ago I was driving boxes to the post office in my Chevy Blazer and dreaming of a forklift,” says Jeff Bezos in his most recent letter to shareholders. A blink later and he points out that the company has grown from 30,000 employees in 2010 to 230,000 now. But his ambition is the same. “We want to be a large company that’s also an invention machine. We want to combine the extraordinary customer-serving capabilities that are enabled by size with the speed of movement, nimbleness and risk-acceptance mentality that is normally associated with entrepreneurial start-ups.” Amazon is great at disruption because of its customers focus and the fact that the internet means it needs none (or very few) people between its warehouses and the shopper. The threat of Prime, its membership service, is the biggest challenge facing the UK retail market and the wholesale market by extension. It is both a direct threat and an indirect threat in that is inspiring countless numbers of othe...
Post a Comment
Read more

Traffic lights: a fuss about nothing

I am sure that FT columnist Michael Skapinker has written about traffic lights food labelling before and his latest article is provocatively called: The food companies that make people fat. He criticises Coca-Cola and Unilever for sticking with guideline daily amounts (GDAs) when traffic lights work much better. Former Walmart Europe public affairs head Bernard Hughes wrote in to support Skapinker. He said: "There isn't ever a perfect information system flowing with beautiful logic. But traffic lights give powerful direction to the busy consumer." But in this age of smart phones surely this debate over the labelling on the packaging is easily overcome. The government can simply issue an app that when held over a bar code provides shoppers with a traffic light system. The supermarkets could do this on their websites. Surely the whole point about the future is that the internet and limitless data storage means that the shopper is being empowered with the informatio...
Post a Comment
Read more

Sunday trading consultation: fair or fixed? You decide.

My local council, South Oxfordshire, asked me to complete a survey on Sunday trading as a local resident. The deadline is next week. The first question was about the current arrangements and what I thought. There were five options: large shops shouldn’t open six hours is already too long current restrictions are about right large shops should be allowed open for longer no restrictions. My answer was the current restrictions are about right. The next question was about what would happen if the council allowed large stores to open for longer. The menu included 10 options and a space for other. The options were that it would: encourage me to shop more in my local town give me more flexibility impact on my religious or cultural beliefs have a positive impact on my business have a negative impact on my business increase footfall to my business reduce footfall to my business provide more employment opportunities open to me in the local area mean that I need to...
Post a Comment
Read more