Team efforts recognised at retail awards

Few people would dispute that the FMCG sector is tough to operate it. Margins are tight and customers are ever more demanding, which affects all those involved in the industry, from retailers through to distributors and producers. The government’s recent call on the UAE’s cooperative societies to limit price increases on certain items to 5% underlines the problem that many companies in the sector face.

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By  Roger Field Published  May 9, 2006

|~||~||~|Few people would dispute that the FMCG sector is tough to operate it. Margins are tight and customers are ever more demanding, which affects all those involved in the industry, from retailers through to distributors and producers. The government’s recent call on the UAE’s cooperative societies to limit price increases on certain items to 5% underlines the problem that many companies in the sector face. If rents and costs of other essential services are all increasing, then companies involved in the grocery sector must also pass those costs on. And then there are the arguments between distributors and retailers, which usually hinge around retailers complaining that their suppliers are making unreasonable price hikes, while producers complain that they are having their margins squeezed by the big supermarket groups. Distributors also face a tough time with retailers who plan to bypass them altogether to buy their goods directly. But less is heard about how these different groups operating within the FMCG sector are collaborating to achieve common goals. The Retail News Middle East team regularly hears stories of how companies from different parts of the FMCG sector are joining forces, and this is perhaps not surprising, as all parties in the industry rely on each other. This was certainly apparent at the inaugural edition of the Retail News Middle East Awards, held in Dubai in April. Indeed, most of the 13 winners had one thing in common, and that was their ability to work closely with key partners to achieve common aims. For example, Gillette, which won an innovation award for its M3Power, went to great lengths earlier this year to inform the region’s supermarket groups about its new razor and even staged a road show around the UAE to demonstrate the product to key account holders. Similarly, another winner, NTDE, demonstrated that distributors have a big role to play in supporting producers and retailers; the company was instrumental in increasing the market share of Lays crisps in the UAE from 7% to 24% in just four years. Lipton also has a reputation for looking after its key account holders, and staged a tea party for its hot teashop clients a few months ago. Perhaps it is time for companies in the FMCG sector to look more at how they can work with each other rather than operating in isolation. Roger Field. Editor. E-mail: roger.field@itp.com ||**||

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