Friday, December 19, 2014

Annual Kantar Retail Ranking of the Top Retail Supply Chains for 2014
Walmart Dominates Once Again, with Giant Lead over Number 2 Kroger

What companies have the top top supply chains in the retail sector associated with food and consumer packaged goods channels?
Well as usual, the analysts at Kantar Retail once again tried to answer that question a few weeks ago, picking up the work of the annual PoweRankings report that was started many years ago by Cannondale Associates, which Kantar later acquired.
SCDigest Says:
Another manufacturer noted that "Target has good collaboration with the replenishment group. They work to minimize returns. They have strong store execution."
The full report covers a number of company performance measures for both consumer goods manufacturers and retailers, including such areas as brand power, marketing programs, sales teams, overall business fundamentals, and more. Supply chain management is one of those categories included in the survey.
The rankings for this year, as always, were developed through the interesting methodology of asking retailers to rate manufacturers on each of these categories, and manufacturers to rank retailers on a similar set of attributes. Most major CPG companies and retailers participate, with some 400 respondents in total across both groups.
Both manufacturers and retailers are from the consumer packaged goods, food and beverage areas. That means manufacturers in such categories as apparel/soft goods, electronics, hard goods, etc. are not included. Similarly, the participating retailers are drawn exclusively from sectors such as mass merchandise, traditional grocery, warehouse clubs, and drug store chains that focus on consumer packaged goods sales, and do not for example include department stores or most specialty retail areas.
The scores represent the percentage of respondents that place a given manufacturer or retailer as having one of the top three supply chains in the industry.
This week, we will look at the results for retailers. Last week, we published the list of top consumer packaged goods manufacturing supply chains, with General Mills and Procter & Gamble in a virtual tie for the top spot (see Annual Kantar Retail Ranking of the Top Consumer Goods Supply Chains for 2014).
As usual in retail, Walmart continued to dominate the rankings for the umteenth consecutive year, coming in with the same impressive 91.2% score that it enjoyed in 2013.

That puts Walmart just shy of 60 percentage points ahead of number 2 Kroger, which traded places with this year's number 3 retailer Target, as rated by the manufacturers. The full top 10 is illustrated below.

 
Source: Kantar Retail

The top 10 is virtually unchanged from 2013 to this year, with just a couple of retailers flipping positions and no one leaving the top 10 from last year or new entrants this year. Amazon's number 6 rating is interesting given its consumer packaged goods business is still relatively small compared to brick and mortar retailers.


SCDigest would actually like to talk with the handful of manufacturers that did not put Walmart in their top three to learn why.

Manufacturer comments including the following: "Walmart has built organizational strength from their supply chain expertise (inventory management, data, fulfillment, etc.) - cost optimization is a key plank."

Another manufacturer noted that "Target has good collaboration with the replenishment group. They work to minimize returns. They have strong store execution."

Add one other: "Kroger leverages learnings from their own manufacturing operations to take costs out and improve scale."

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