With today’s challenging economic conditions, all companies are under pressure to remain profitable and hit earnings expectations. Retailers may be feeling the greatest stress of all, simultaneously dealing with inflation, changes in consumer sentiment, and loads of unwanted inventory. The result? Working capital problems galore.
Watching for evidence of how retailers handle this combination of circumstances is an education in and of itself. In some cases, it is instructional and in others it is a clear what NOT to do.
Case in point… a recent news story involving Target, Walmart, and a few suppliers who are decidedly unhappy with recent changes in their business arrangements. According to those suppliers, they have been asked to pay for their own logistics costs, hold inventory longer than expected, and accept reductions in order volume. How do we know about this frustration? They spoke to the media about it: on the record.
Philip Ideson is the Founder and Managing Director of Art of Procurement. In this Dial P for Procurement interview, he and host Kelly Barner discuss this scenario and apply their own experience to pull out as many lessons as possible for the rest of us:
- Why retailers currently find themselves in this challenging situation
- How the strain is affecting their supplier relationships in the short and longer term
- What options might have been better to pursue – perhaps preserving the effectiveness of the supply ecosystem