Independent Pulse ‘Chilled and Perishables’

Supplier SatisfactionReport 2010

©Independent Pulse 2010 - ACN 121 826 168/2010

In a time of strong chain competition and market share domination, we need solid supplier support with a point of difference for independent retailers to ensure continued growth as the clear, ‘third force’ in the Australian grocery channel.

Independent Pulse is a totally independent research company, that works closely with a number of industry bodies to ensure relevance and achievement of improved service level understandings.

The solid support of the major banner groups has enabled Independent Pulse to grow and consolidate this important research resource to the benefit of the entire industry.

Independent Pulse provides supporting banner groups with their own tailored reports so they may utilise their member’s feedback to gain focused future directions, with strong supplier support that result in positive, mutual outcomes.

“Over the past 3 years the Independent Pulse “Chilled & Perishable” Supplier Satisfaction Surveys has contributed greatly to defining what and how the AMC & Strikeforce teams have gone to market within the Independent Market in Australia. This year’s results have been no different and again are not only very informative but extremely satisfying given the increase we have achieved in the service satisfaction area. Based on last year’s results the survey indicated the areas of opportunity were to increase frequency, to improve our communication and to follow through on the value of deals and incentives we provide to both large and small stores.

This year the survey has reflected an increase of 38% in store satisfaction levels delivered our increased call frequency, we will again base our Independent plan around these findings and move into 2011 with an improved focus on service levels and an increase of 40% in infield resources taking total full time employees to 33 across the nation. Latest retail sales data would indicate that the independents have managed to hold share within the competitive market, given we are able to measure the results of the investment in Independents and the growth that can be gained from such resources the Pulse Surveys are not only essential they clearly identify the needs and requirements of the Independent sector.

The survey respondents continue to increase and are expanding across a broader group of stores and regions, the cross sections being delivered will continue to grow and become more informative than the last surveys, I look forward to the results of the next round and hopefully stronger results moving forward.”

Adrian Luxford - CEO - Strikeforce Alliance

Independent Pulse would also like to thank the dedicated team at Retail World who have supported this independent research right from its inception, without which, this important research may never have resulted in the industry service achievements we have seen in this report.

Independent Pulse had a mid July launch of its second annual Grocery Survey in the last edition of Retail World. Independent Pulse would like to invite all of you who have an interest in seeing improvements in your business provide your vital feedback in this latest industry research initiative. If you require any additional information or would simply like to know more about us and our research please contact Janani at our office either by phone on +61 433 124416 or email Janani@pulseplus.com.au.

Independent Strength throughIndependent Knowledge

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TOp 10 rESpOndEnT fEEdbACk fOr SuppLiEr imprOvEmEnT

AMC

Strategic National

Strikeforce

Bailey

Others

60%

23%

21%

29%

59%

Yakult Co.

Nestlé

Menora Foods

Simplot

National Foods

San Remo

Fonterra

Kraft Foods

Manassen

Don KRC

Hans Continental

Paramalat

Yumis

Chris Dips

Regal Cream

McCain Foods

Patties Bakery

Unilever

Heinz

P&M Small Goods

Competitive Prices Vs Major Chains

Regular Call Cycle

Stock Rotation / Out of Stocks

Rep Product Knowledge / New Lines

Merchandising Assistance

Increased Rep Call Cycles

Promotion’s / Media Support

Better Service / Better Communication

Plan-O-Gram Assistance

Credits Provided

82%

48%

44%

42%

35%

27%

25%

24%

14%

11%

11%

73%

73%

69%

63%

62%

58%

55%

53%

46%

44%

39%

37%

35%

32%

23%

21%

21%

20%

20%

TOp 10 ‘ChiLLEd & pEriShAbLES’ SuppLiErS OvErALL SATiSfACTiOn

Firstly, the Independent Pulse team would like to thank all those Independent Retailers who took time to provide their considered feedback in the 2010 “Chilled & Perishables” Supplier Service Satisfaction Survey.

The information captured by the Independent Pulse research not only provides suppliers with the means to understand which services require improving, it also rates their retail customers, or stakeholders, level of total satisfaction.

The results presented in this report demonstrate a commitment by suppliers to this essential industry research, which assists in developing and improving their service levels and understandings.

Best practice service is not an incidental process; it is paramount for remaining competitive and for building effective field team solutions. This can only be achieved by ensuring suppliers are acutely aware of their stakeholder’s requirements and those of their customers.

The following report captures a snapshot of the data gathered from the 2010 Independent Pulse research. We hope you enjoy this sample of insights and gain a further understanding of the importance of this vital, on-going industry research.

All up 159 owners and managers responded with 70% of those providing feedback from large stores with an annual turnover of over $15 million. This substantial sample provides us with 95% confidence levels in the research results. (Please refer to graph opposite).

“The Independent Grocery environment is ever changing and to continue being relevant to our valued customers requires regular feedback and review. Independent Pulse is now one of the vehicles that we can rely on each year to provide us such observations.”

nigel drews - national Sales manager - retail Operations for Simplot Aust.

©Independent Pulse 2010 - ACN 121 826 168/2010

“The Independent Pulse survey has helped Fonterra better understand our independent retail customers; identifying the opportunities and challenges our business should address to enhance our working relationship.”

richard kirkpatrick - national business manager independents - fonterra

“The Independent Pulse survey results are an extremely valuable tool for us to understand how well our field force is delivering against our customers service expectations. Strategy execution at store level is critical, and we are continually investing in our field’s capability to generate sales and profit opportunities for independent retailers. This survey helps us identify those areas we’re doing well in, but importantly gain feedback from our customers on where we can improve.”

daniel Ahern - General manager independent Grocery - Coca-Cola Amatil Aust.

independent pulse ‘Chilled and perishables’ Supplier Satisfaction report 2010

From the above respondents feedback Independent Pulse can measure suppliers infield satisfaction on attributes such as call cycle frequency, information on their products, pricing and deals, effective merchandising and organising credits, delivering on agreed plans and tailoring activities to assist with sales and profit.

Over $20m38%

$5 to $10m3%

SA/NT11%

WA11%

TAS3%

NSW30%

VIC28%

Others3%

Foodworks12%

SPAR4%

Franklins3%

IGA24%

Supa IGA54%

QLD17%

Not Specified2%Up to $5m

0%

$15 to $20m34%

$Over $30m9%

$10 to $15m14%Over $20m

38%

$5 to $10m3%

SA/NT11%

WA11%

TAS3%

NSW30%

VIC28%

Others3%

Foodworks12%

SPAR4%

Franklins3%

IGA24%

Supa IGA54%

QLD17%

Not Specified2%Up to $5m

0%

$15 to $20m34%

$Over $30m9%

$10 to $15m14%Over $20m

38%

$5 to $10m3%

SA/NT11%

WA11%

TAS3%

NSW30%

VIC28%

Others3%

Foodworks12%

SPAR4%

Franklins3%

IGA24%

Supa IGA54%

QLD17%

Not Specified2%Up to $5m

0%

$15 to $20m34%

$Over $30m9%

$10 to $15m14%

TurnOvEr ($miLLiOnS) STATE brEAkOuTS 98% in A bAnnEr GrOup

AMC

Strategic National

Strikeforce

Bailey

Others

60%

23%

21%

29%

59%

Yakult Co.

Nestlé

Menora Foods

Simplot

National Foods

San Remo

Fonterra

Kraft Foods

Manassen

Don KRC

Hans Continental

Paramalat

Yumis

Chris Dips

Regal Cream

McCain Foods

Patties Bakery

Unilever

Heinz

P&M Small Goods

Competitive Prices Vs Major Chains

Regular Call Cycle

Stock Rotation / Out of Stocks

Rep Product Knowledge / New Lines

Merchandising Assistance

Increased Rep Call Cycles

Promotion’s / Media Support

Better Service / Better Communication

Plan-O-Gram Assistance

Credits Provided

82%

48%

44%

42%

35%

27%

25%

24%

14%

11%

11%

73%

73%

69%

63%

62%

58%

55%

53%

46%

44%

39%

37%

35%

32%

23%

21%

21%

20%

20%

*Percentage of respondents either Very Satisfied or Satisfied with Suppliers overall service

This chart shows suppliers who have achieved excellence in overall satisfaction. The obvious stand out being

Yakult who demonstrates that with a strong focus and understanding of stakeholder requirements suppliers can

provide very high levels of satisfaction regardless of a relatively small product portfolio.

The Independent Pulse research measured the satisfaction level of 35 FMCG suppliers with strong

results for most who were included, demonstrating the competitive nature of the Independent grocery channel.

TOp 5 fOOd brOkErS OvErALL SATiSfACTiOn

AMC

Strategic National

Strikeforce

Bailey

Others

60%

23%

21%

29%

59%

Yakult Co.

Nestlé

Menora Foods

Simplot

National Foods

San Remo

Fonterra

Kraft Foods

Manassen

Don KRC

Hans Continental

Paramalat

Yumis

Chris Dips

Regal Cream

McCain Foods

Patties Bakery

Unilever

Heinz

P&M Small Goods

Competitive Prices Vs Major Chains

Regular Call Cycle

Stock Rotation / Out of Stocks

Rep Product Knowledge / New Lines

Merchandising Assistance

Increased Rep Call Cycles

Promotion’s / Media Support

Better Service / Better Communication

Plan-O-Gram Assistance

Credits Provided

82%

48%

44%

42%

35%

27%

25%

24%

14%

11%

11%

73%

73%

69%

63%

62%

58%

55%

53%

46%

44%

39%

37%

35%

32%

23%

21%

21%

20%

20%

This chart shows Food brokers who have achieved recognition in overall satisfaction. The most apparent outcome from this

research is that food brokers hold a lower level of stakeholder satisfaction than the majority of suppliers in the 2009

research. This of course enables food brokers to achieve focused improvements that in turn provide better and stronger

stakeholder relationships.

*Percentage of respondents either Very Satisfied or Satisfied with Brokers overall service

It is clear to all most manufacturers from this year’s valued respondent feedback are listening and that the main areas for

improvement are centred around the growing price gap between the aggressive

low prices in the major chain stores, Aldi and Costco and that of the Independent

supermarkets. Where by the Independent Retailer is often forced in many grocery

/ perishable commodity categories including many of the high volume low margin key consumer interest product

SKU grouping’s to match their local competition and incur lower gross profit

margins to remain competitive.

The secondary areas of improvement mostly stem from the old chestnuts of the supplier Rep. satisfaction and/or supplier service level improvements due to the fact that many mid to larger size Independent Retailers do value the individual supplier and brokerage

Rep. calls, and that they want to be more regular and for these Rep calls to add value operationally to assist their businesses grow as shown in this chart.

*Percentage of respondents either Very Satisfied or Satisfied with Suppliers overall service

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