Five and manufacturers

The Russian consumer market is increasingly becoming an arena of conflict between manufacturers and retailers. One of the main violators of the peace is the chain of stores “Pyaterochka”. Most are interested in promotions in supermarkets in Donetsk, Rostov region , so you can buy at low prices.
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The Russian consumer market is increasingly becoming an arena of conflict between manufacturers and retailers. One of the main violators of peace is the chain of stores “Pyaterochka”. The first in a series of “five” was the sausage business. The chain of stores set Parnas-M a number of conditions that the largest local producer of sausages did not want to go to. As a result, “Parnas-M” left “Pyaterochka”, lost sales, and the place vacated on the shelves took the place of Moscow’s “small traders”. If retail will continue to be the seller’s market, then with the advent of several Moscow networks, uncompromising manufacturers risk losing the market. On the other hand, discounters also do not win by losing well-known brands (most recently, the same “Five” came into a similar conflict with Procter & amp; Gamble, Johnson & amp; Johnson, etc.). DP decided to find out the positions of the parties. The severity of the situation was evidenced by the fact that some manufacturers at one mention of “Pyaterochka” just hung up.

Serhiy Lepkovich, director of the St. Petersburg chain of stores “Pyaterochka”: “We approach the work with suppliers very carefully. We have implemented a four-level quality control system. The first level includes analysis of product quality etc. The second level – – inspection of products by independent experts. We have high requirements for suppliers, which must ensure constant quality of goods and increase their competitiveness and work at minimum prices.

Service, logistics, packaging and document management must also meet our requirements. increases the time of sale of goods. Compliance with these criteria is a prerequisite for the cooperation of “Five” with suppliers. And this applies to absolutely everyone. Due to the strict conditions of cooperation today in the market of meat products, we are most active in working with Moscow plants – “Mikoyan” and “MLM”. Local producers in their mass still offer us low quality products and high purchase prices. In addition, Muscovites are well aware that our network provides such opportunities to increase sales that no distribution network can provide. We had a situation in August last year, when Mikoyan through our network increased sales by almost 20%, and lost just as much one of the local producers, when we refused to work with him because of unreasonably high prices. We can not underestimate our ability to promote the product. Muscovites understand this and use every opportunity to enter the north-western market. For example, MLM, by betting on our network, has become a very serious player in the local market. Now St. Petersburg producers will have to squeeze. Foreign networks such as Retail Metro, Spar, Caffour and others are announcing their plans to enter Russia. And if they trade at the lowest prices for Italian spaghetti made from the highest quality flour, domestic producers of “rubber” pasta will simply lose their business. The situation is changing very dynamically, and when the market is saturated, no one will be able to enter it. Moscow is well aware of this and strives to take up as much space as possible. ”

Serhiy Statkevych, Finance Manager of the Meat Processing Department of Parnas-M OJSC:. We do not work with Pyaterochka because we are not satisfied with the terms of cooperation they impose. These are, first of all, the terms of payment and exorbitant discounts demanded by Pyaterochka to compromise with this network, there is a fierce struggle between us for acceptable cooperation. Although so far our communication with the “Five” is far from ideal. we, as representatives of St. Petersburg manufacturers, do not feel alone in the fight against the terms of cooperation, which declare the same “Pyaterochka” and other networks. Many want to find a compromise in this area and someday necessarily agree among themselves. ”
Gennady Emelyanov, CEO of Pit-Product LLC: “The priority of Moscow plants is due to the high technical equipment of these enterprises and the ability to produce quality products in volumes that meet the requirements of the network. But we have been working with Pyaterochka since 1999.” Pyaterochka is constantly selecting suppliers of sausage products on a tender basis, in which Pit-Product once participated. In the conditions of careful selection, we were able to provide Pyaterochka with the necessary conditions for cooperation. This is not due to the vagaries of the network, but to the growing demands placed on products by end users, and in the face of competition among manufacturers due to growing customer demand, demands on suppliers will continue to grow. foreign experience shows that in a market economy, the existence of non-chain stores near the largest supermarkets is justified. myself to Discount “.

Igor Ivanov, General Director of the Velikoluk Meat Plant (Keskus Plus LLC): Pyaterochka works with Muscovites because they offer more favorable terms of cooperation. However, we also work with Pyaterochka and consider their requirements for product quality to be fair or not too high. Although it is known that the purchase prices of “Pyaterochka” are more rigid than in part, and explains the rapid growth of their network. In the future, I believe, Muscovites will inevitably have to squeeze into this market, as Moscow products are not always of high quality and quite expensive compared to local and our, Veliky Luk products. Especially if we take into account the low income of St. Petersburgers compared to Moscow. Even if many networked Moscow and Western retailers come to the city in the next year or two, I don’t think local producers will lose the market. Because no one will focus exclusively on Moscow suppliers. ”

Maksym Chernihivskyi, Director of Marketing, Euroservice Ltd.: “It is difficult to give accurate estimates, as I am not familiar with the situation thoroughly. – .. a powerful business step in terms of marketing and sales policy We can say that in the presence of “Pyaterochka” primarily interested in new brands, little known to consumers, or those brands that are in St. Petersburg still in short demand When it comes to brands It is well known that the losses for them are not so great. Gamble, Johnson & amp; Johnson and several other large companies. It cannot be called a dictation or an ultimatum from the seller. Some offered conditions, others did not agree to them, that’s all. Representation of such a powerful brand as Procter & amp; Gamble will not harm any store, but the manufacturer also loses, losing such a distribution network. The position of the “Five”, from the point of view of the information field, is clear, and it is absolutely correct: these stores are visited by a certain target group of consumers, and they fight for the interests of this group, declaring the need for minimum prices. Procter & amp; Gamble had to react, and he responded by saying that the company had the same conditions for everyone. Did not agree. Who loses more? Yes, to the same extent, both. Moreover, I am confident that a compromise will be found soon. ”

Samvel Avetisyan, Marketing Director, Tinkoff; This conflict is not unique. For example, in Moscow at one time “Crossroads” fought with “Wimm-Bill-Dann” and so on. In general, we can say that the situation is both dangerous. logistics, there are statistics, there are figures that say which product to work with most profitably. But I think it will take a couple of years and everything will “settle down” Manufacturers and sellers will stop exchanging injections and will come to understand that we need to work on one side of the barricades – to do business together and solve one task: .. how to attract consumers Foresight companies always agree The same “Wimm-Bill-Dann” agreed with the “Crossroads”.

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