Today’s post is from Ronald D. Southard CEO at SafeSourcing
Yesterday Aldi announced that their new capital plan includes building five hundred new locations across the USA in the coming years. Obviously, everyone knows who Aldi is and how they attract and retain customers. Quality products at low prices. In the face of inflation that is not headed in the right direction, customers are exasperated with the pricing they find on the shelves of their local supermarkets and other food retailers.
In a post titled Inflation still hotter than hoped By Cate Chapman, Editor at LinkedIn News notes that, A key gauge of inflation rose more than expected for a second month in February, as gasoline prices and shelter costs increased. While this does not directly point to food costs, it does mean that your customers are being hit in every direction. It would appear to me that wise company executives might try to figure out ways to help their customers by focusing on their cost of goods and expense spending as a priority, and pass some of it on to their customers and not just to the bottom line.
As someone who has a front seat to bids for cost of goods and expense items in the retail space, I’m here to tell you that as retailers you are paying too much and as such so are your customers.
I have often posted about the benefit of asking for better pricing through the use of cloud-based bid tools that are supported by white glove hands on services and the impact the results can have on your bottom line. This can benefit your customers and your shareholders. A simple answer as to why we get better results than you do, is that we source the categories more often. While a company may source a category like trash hauling every two or three years, we source it dozens of times every year. While you may have sophisticated tools, unless they are supported by a team that has multi event annual experience, your results will not be as good.
Our average annual savings across all categories for the last five years is greater than 24% below what our customers have negotiated on their own. Those kinds of savings mitigate rising costs elsewhere, raise gross margins, improve earnings, and maybe leaves something on the table for your customers.
SafeSourcing is a Procure to Pay SaaS based provider of a number of e-Procurement solutions and associated white glove services that are part of our SaaS offered SafeSourceIt™ eSourcing suite .
For more information, please contact a SafeSourcing Customer Services Associate.