E-Sourcing Forum » Crisis = Opportunity?

Crisis = Opportunity?

March 16th, 2009 at 07:36am Agatha Degasperi - Iasta Europe

Being a “glass half full” kind of person, I’m always trying to look for a glimmer of light amongst the darkness, and maybe there is some despite the economic crisis?

Well, a little trouble has been brewing in my country of residence, Belgium, this past month between Delhaize (one of the biggest supermarket chains in Belgium) and its supplier Unilever. The Delhaize Group was boycotting over 300 products from Unilever, which they claimed to be too expensive and too varied for their customers. At the core of the conflict was Delhaize’s complaint that Unilever had increased its prices to a point that would make the products 20% to 30% more expensive for their end clients. While Unilever defended their position by saying their products have only increased by 2% to 3% (so less than inflation).

So what has this meant for the consumer and the competitors? Well, both Delhaize and Unilever suffered a noticeable drop in their clientele following this price dispute, according to an independent survey conducted by the advertising firm Brandhome. Consequently, over 30% of Delhaize clients have moved on to other retailers in an effort to find Unilever products, benefiting predominantly the Colruyt group and then Carrefour. For customers still loyal to Delhaize, they have chosen to buy other brands such as Danone and Proctor & Gamble.

Just this past Friday, came news that after weeks of negotiations Unilever and Delhaize have buried the hatchet by agreeing to end the conflict all while managing to not disclose the conditions of their final agreements. So despite things being back to business as usual (so it seems) it still brings somes questions to mind: Isn’t the current economic crisis an ideal opportunity for educating consumers to choose better? Doesn’t it put buyers in a position of power to make better decisions and stand up to bigger suppliers? Doesn’t this help create new opportunities for both the consumers and suppliers down the line? I think the dispute in Belgium was proving to do just that…

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Entry Filed under: General, Global Supply Issues/Risk

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