Survey: Mistrust hampers grocery supply chain collaboration

Grocery retailers and suppliers who successfully collaborate can improve customer service and operating efficiency.

According to a new survey of 210 grocery/FMCG/CPG manufacturers/suppliers and retailers from Coresight Research and Precima, a Nielsen company, 63% of retail respondents and 52% of supplier respondents cite lack of trust and communication as “challenging” or “very challenging” when collaborating. 

Persistent trust issues keep retailers and suppliers from sharing granular insights with each other, resulting in issues such as 63% of retailers and 55% of suppliers considering a lack of product availability to meet shoppers’ changing demand to be “challenging” or “very challenging.” Similarly, 62% retailers and 56% of suppliers say limited data transparency across supply chain is “challenging” or “very challenging.”

In one positive trend, 85% of retailers said that their collaboration has improved with their suppliers over the past two years, while 92% of suppliers said that their collaboration has improved with retailers over the past two years. Furthermore, just 1% of retailers and suppliers each said that their collaboration has worsened.

Improved customer service emerged as the top advantage of good retailer/supplier collaboration, with 39% of all respondents citing it as a key advantage. Higher efficiencies in operations surfaced as the second-best advantage of a good retailer-supplier collaboration, according to 37% of all respondents. One-third (33%) of all respondents cited lower costs in supply chains as the key advantage of good retailer-supplier collaboration.

The majority of surveyed retailers (75%) cited their suppliers’ ability to fulfill their promises as “important” or “very important” for successful collaboration, making delivery on promises the top criteria for this group. The most important criteria for suppliers when collaborating with retailers was having appropriate resources, with 60% of surveyed suppliers citing this criterion as “important” or “very important.” 

Having appropriate resources to mine data and its interpretation is more important to both retailers (70%) and suppliers (60%). Six in 10 retailers and almost five in 10 suppliers cited their partner’s ability to identify actionable insights as “important” or “very important.” In addition, 70% of the retailers and 58% of the suppliers cited responsiveness to consumer and market trends as “important” or “very important.”

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