Squeezing Suppliers Must Not Replace Shrinkflation
As France orders retailers to display shrinkflation, HICX’s CEO and supplier expert, Costas Xyloyiannis, warns manufacturers seeking alternative cost-cutting ways to not pass the burden to suppliers, because doing so invites the ultimate competitive disadvantage.
While squeezing suppliers on price may seem a safer substitute to shrinking product sizes, holding prices, and then displaying this move to shoppers, it is counterproductive. The old practice of beating suppliers down on price doesn’t work in today’s uncertain landscape. Now, businesses need resilience. But they will find themselves in a bind if they use suppliers to cut costs.
Read also: How to Save Money through Suppliers without Sacrificing the Value they bring
This doesn’t mean excluding suppliers from savings strategies, because suppliers have a host of value and cost-saving opportunities to offer.
How then, do we proceed? The trick is to stop beating suppliers down on price and to start viewing them as partners.
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