Trade Terms Negotiation

The project, which involved reviewing the existing terms, creating new terms and coaching these with the team, was an outstanding success.

An indication of the way in which the project developed is summarised in the statement that one of the account managers sent to his colleagues during the project implementation phase.

Hi guys,

Yesterday I went up to Leeds for the first round of terms negotiations with ASDA. I know many of you have meetings coming up so in case it is useful to you please see below some of my experience in yesterday’s discussion. I appreciate every retailer is different but the trading landscape is similar for all so it may be you will experience the same kind of things. Please take whatever positives from the mail you feel appropriate, as I do not want to teach granny to suck eggs, or belittle any challenges elsewhere, but would rather give you my thoughts than keep them to myself in case it helps:

Presentation – The teeing up of the terms negotiation through a presentation worked really well (Thanks for all your hard work Joe). It reinforced the “seizing the agenda” approach and forced the Buying Manager to hear all of our strengths and the reasoning behind movements in the package. This for me put me in control as it showed that a) we had done our homework and b) there were strong reasons behind every piece of the terms puzzle.

Terms Total Package – Whilst I think we struggle to rationalise in our heads at times a reduction in percentage investment it became apparent to me that ASDA weren’t expecting a great deal from us. Whether this is specific to ASDA given the way we had teed things up or is a wider market I cannot be totally sure, but my gut feel is that terms are shrinking in general and the same is expected from us, so it may not be as controversial as you may feel.

Terms Alignment / Recut – By stating our position early on the reasoning behind restructure in some areas and alignment in others this became much less emotive than it has been in the past. Personally I felt very confident as it soon became clear that our perspective had been far better researched and backed up than any ASDA view. There is certainly a great deal of truth that those that are better prepared come out on top.

Overall it was a very strong meeting and whilst there is still discussion to be had I now feel much more confident that we can deliver big space gains in ASDA in 2012.

Hope some of it helps, and best of British (or Belgian, Welsh(ish), or Columbian) for your meetings.

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