UK general merchandise retailer

COGS Reduction and Margin improvement programme

  • business challenge

    A top 10 national general merchandise retailer with over 400 stores selling a mix of branded and private label products. Following an 8-week diagnostic, we were engaged to deliver ambitious cost reduction and margin improvement targets. Lack of access to commercial data and a core sourcing capability was not identifying alternative suppliers restricting competitive tension. Core suppliers not treated consistently and key category decisions lacked customer / market insight

  • our approach
    • built a wave plan of activity with each of the category leads that balanced buying better, product mix and trading strategy
    • reviewed all spend areas against 4C Retail procurement levers to each sub category to understand potential scope for deployment
    • agreed timelines and benefits phasings for 200+ projects ensuring alignment to Right Customer Choice
    • agreed Baseline and Savings methodology for each project to show how benefits will be measured and tracked
    • ensure governance in place so client and consultancy team deliver to plan

value delivered

  • CGM improvement of 1% in year 1 with an incremental 2% for year 2
  • incumbent team challenged with new approaches to sourcing challenges and new ways of preparing for negotiations
  • delivered dashboard toolkit that put data at the fingertips ensuring data-based decision making
please contact Andrew Davidson

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