Suppliers work through recession, competition

05/22/2009 03:37:08 PM
Ashley Bentley

The Twin Cities market took a turn for the worse around fall 2008 and has yet to recover, suppliers said.

“There was a big blow-down last fall. We really saw stores slowing down this winter. At the beginning of the year, the trend was that same-store sales were down,” said Adam Gamble, general manager of the North Country Produce division of distributor Russ Davis Wholesale, Inver Grove Heights.

“What we do find in the co-op sector is a lot of price shopping going on, “said Tom Rodmyre, warehouse manager for Co-op Partners Warehouse, the distribution arm of The Wedge, Minneapolis. “They’re comparing between two to four distributors and shopping based on price. There’s less of a focus on quality.”

Although it can save buyers money, Phillip Brooks, chief executive officer of Brighton, Minn.-based H. Brooks & Co., warns that a focus on price can be dangerous for competitiveness.

"I think our business has really been hurting for years because of the takeover by big corporations, so we had already trimmed our ship pretty good."

- Paul Piazza Sr.

 

“You can make a decision based on price, but you could lose quality, and once that happens, you’re no longer differentiated,” Brooks said.

Rodmyre said he noticed the market changing around November of last year. The increase in price shopping started the summer before, though, he said. The company’s volumes have been down for five or six months, he said.

“It was all related to the fuel surcharge,” Rodmyre said. “All through the summer last year, trucks were running around at $4.25 a gallon, people started adjusting their prices, and at the stores all started shopping by price, just because of all the money they’d paid for fuel surcharges put on by distributors.”

On the contrary, Paul Piazza Sr., president of Minnesota Produce Inc., Minneapolis, said he has found it difficult to get potential buyers to price shop.

“If people were really shopping, there would be more business with independents,” Piazza said. “The marketplace is more about corporate royalties. Customers tell us over and over again, they’re just order placers, and they don’t shop around.”

Piazza said his concern is that there aren’t enough out there who do shop around anymore. Minnesota Produce stays competitive by using its skills of knowing the market and finding values, he said.


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