Power Shift and Retailer Value in the Swedish FMCG Industry
Business and economicsRetailer valueFMCGSupplier-retailer relationshipsRetailer powerSu Mi Park DahlgaardEkonomi
Background: The recent years in the Swedish Fast Moving Consumer Goods industry have been characterized by a palpable shift in power balance, favouring the retailers. Since the shift in power balance has strengthened the negotiation position of the retailers, the suppliers now have to, to a greater extent than before, accommodate to the retailers? goals, whether they be financial or strategic. Purpose: The aim of this study was to investigate how this recent power shift has affected the relationships of suppliers and retailers. This development has resulted in the rather new and unexplored area of retailer value, which this study further aimed to explore. Research method: Interviews were conducted with representatives fromthe leading retailer chains and market leading suppliers. Results: The increased use of information and control on behalf of the retailers has led to the suppliers, to a greater extent than before, having to adjust to the retailers'different store concepts. However, in order to create retailer value, the suppliers also need to focus on the consumers? needs and preferences, since the way to the retailer?s shelves is through creating consumer demand. They also have to stay innovative and make use of the experience and in-depth knowledge they possess within their product segments, as that is where they still have the upper hand.