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Co-operation Vital in A Competitive Market

Published on Dec 9 2010 9:38 AM in Retail

Co-operation Vital in A Competitive Market

Richard Brasher, Tesco’s commercial and marketing director, believes the grocery industry is built on honest competition, but says the global challenges ahead will demand a new level of co-operation.Our achievements [as an industry] have not been delivered by retailers alone. Nor by manufacturers on their own. Together we have worked hard and have delivered on behalf of our customers.

But when I say we have done this together - retailers and manufacturers - I am not trying to conjure up a romantic idea of us sitting together holding hands, one set of common interests and no commercial tension between us. You wouldn't recognise this as authentic. And, to be frank, any such relationship would not have at its heart the relentless drive, focus and inventiveness that defines our industry.

The hallmark of our industry is not some cosy notion of collaboration. It is competition. 

All day, every day, retailers compete for customers' attention, for their trade and for their loyalty. In a competitive market – and ours is a truly competitive market – the gap between success and failure is narrow. To succeed we must compete on price, on quality, on service, on innovation.

And it is the relentless drive underpinning this competition which helps improve and transform our products, our offer and the lives of our customers. As to the relationship between retailer and supplier, I know it has provoked almost as many newspaper column inches as the relationships on Eastenders. But the simple truth is that the king in this relationship is not the retailer.

Nor is it the supplier. Again it is the customer. It’s difficult to have an argument with the customer. What customers thought was a good quality product one week becomes the same old product the next. To win we cannot stop raising the bar, pushing ourselves to be better, going that extra mile. Our relationships are competitive. But providing what is best for the customer gives us a shared focus. 

In pursuit of this focus we put each other under pressure. For better products.  Lower prices. More effective marketing. This pressure, in truth, cuts both ways.  Suppliers push on behalf of their products, new or improved, and the potential of these products to satisfy the customer. Retailers push to give the customer new choices, more convenience, fresh ideas. The customer is in the driving seat, empowered through the choices they can make.

I believe this commercial tension between retailers and suppliers is positive and healthy. Strong and fair competition forges strong and fair relationships. It has made our industry more efficient as well as more creative. Customers demand continual change and improvement. Our response has created value. Each year, our industry delivers thousands of new products to our customers – many of them are from small businesses.

Competition has made our industry, and made it I believe one of the most dynamic and innovative in the world.  We can be proud of this competition, but proud too of the benefits it has brought not just to our customers but to our economy and society. Year after year, thanks to innovation, investment and hard work, we have made millions of people’s lives better – the food they eat, the goods they own, the quality of life they lead. Long may this continue.

But part of being one of the most dynamic and innovative industry in the world is recognising new conditions and new challenges. I've come to realise that, however much it goes against the grain, there are challenges like obesity and climate change where it just doesn't make sense for Tesco to work alone. We need to work together on these things. And if we succeed, we might just make the most dynamic and innovative industry in the world even better and even stronger than we are now.Richard Brasher made these comments during his speech at the IGD Convention, London, in October 

© 2010 - ESM: European Supermarket Magazine

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