Food Industry News

"Dixie" will directly

Over the next two years, Dixy will double the number of direct contracts with suppliers in order to eventually bring the share of goods directly supplied by manufacturers in its range to the maximum possible.

Over the past few years, the company has been establishing its own logistics, which now allows it to refuse distributor services and reduce purchase prices. Almost all the largest trade networks in the country follow the same path.

Juan Giralt Silva, Vice President for Commercial Activities, told Kommersant about the plans of the Dixy Group of Companies (Dixy and Victoria chains) to increase the share of direct delivery contracts to Kommersant. Deliveries, for example, of vegetables and fruits directly from the manufacturer, can reduce their cost by about 10%, while strengthening quality control, he emphasizes.

Today, in the convenience store format, Dixy already receives about 80% of the goods under direct contracts, but this figure may change depending on the season and category. The increase in the number of direct contracts will be primarily due to new contracts, and this will lead to an increase in their share in the matrix to the maximum possible, said Anton Panteleev, a representative of Dixy. “The work on revising the existing supplies will also go, but the company does not plan to completely abandon the services of distributors in order to keep the products of small manufacturers in the range,” he notes.

Over the past five years, Dixy has been actively investing in the development of logistics: it has built distribution centers and bought vehicles, thanks to which the retailer is now the leader in terms of centralization of supplies among the largest federal networks, says Mikhail Burmistrov, General Director of Infoline-Analytics. New management (in March of this year the company was headed by Pedro Pereira da Silva, who previously headed the Portuguese Jeronimo Martins Group) Dixy has achieved success with the Biedronka network, which has become the market leader in Poland, precisely due to the focus on strategic partnerships with local manufacturers, concluding with them are long-term agreements that reduce the risks of both parties, recalls Mikhail Burmistrov.

A representative of X5 Retail Group (Perekrestok, Pyaterochka, Karusel) says that about 80% of the contracts of the Pyaterochka retail chain are concluded directly with manufacturers. Among the contracts with distributors there is a large share of regional alcohol producers, as well as imported goods, including alcohol, fruits and vegetables. The company is currently addressing the challenge of transferring 100% of contracts in all categories directly to manufacturers "to provide a better value proposition for buyers."

Representatives of the Auchan and Globus networks also speak of their interest in direct contracts. “This saves costs, allows you to reduce the price on the shelf,” explains Maria Kurnosova from Auchan. At the moment, the share of direct contracts with manufacturers in the “food” category - both short-term and long-term storage - is 80%, notes Natalya Rychkova from Globus. She adds that direct contracts also allow better control of product freshness and predict purchase and sales volumes. Next year, the retailer intends to increase the representation of local regional suppliers of agricultural, dairy and farm products through direct contracts, adds Ms Rychkova. In turn, Maria Kurnosova reminds that distributors often provide added value to the product, for example, by solving the logistic problems of the manufacturer.

The distributor consolidates the products of several enterprises and optimizes logistics in such a way as to minimize transportation costs, explains Dmitry Vostrikov, Development Director of Rusprodsoyuz. “As a rule, distributors work with all formats of trade in a particular region, including traditional retail, markets and the HoReCa segment,” he continues. At the same time, direct deliveries increase margins, improve marketing management, but when working without an intermediary, all risks (for example, network penalties, returns) fall on the shoulders of the manufacturer, Mr. Vostrikov notes.

See also ... 06/04/2015 Marketing bonuses for St. Petersburg retail are cut 10/02/2015 The share of Russian goods in stores increased by 10% 18/09/2014 RPN closed the Moscow store of the Dixy chain 15/11/2013 Dixy increased revenue in October by 25% 08/07/2014 Dixy paid off with the founders of Victoria 06/12/2013 Dixy lowered its sales growth forecast for 2013/14/11 Dixy increased its revenue in October by 2014% 29,5/20/05 Bonuses cut for retailers 2015/05/09 Dixy launched its own brand D 2012/20/02 Dixy went over the 2015/04/04 Retailers change places in the rating of the largest chains2013/10/03 Dixy elected a new president / 2016 Dixy's revenue for five months increased by 14% 06/2016/19,4 Dixy CEO Fyodor Rybasov resigned09/02/2016 Dixy goes on a diet

Add a comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to combat spam. Find out how your comment data is processed.