Partnerships between producers and retailers are a necessity
Oct 14, 2015
The 27th MAGROS conference for traders and production companies, organized by the Suvremena trgovina magazine, was attended by Ljerka Puljić, Member of the Agrokor Supervisory Board as well as representatives from the Croatian chamber of Economy, retailers and production companies as well as the Ministry of Economy. The key message at the conference held at the Croatian chamber of Economy was that retail faces new challenges in the following period, and partnerships between production companies and retailers are a necessity of modern business and retailers will have to adapt to modern trading patterns.
Ljerka Puljić considers the partnership between retailers and suppliers a necessity in modern business and points out that the competition in the market created significant pressure on retailers, especially through deflation. “With deflation being the obvious indicator of product value decrease, one must also acknowledge the fact that consumers use sales and discounts ever more resulting in a growing share of discounted sales. The consumers really became rational and they are not likely to return to behavior they had before the crisis.” said Puljić. She also considers that listening to consumer wants and needs is very important and, consequently, it is the duty of suppliers to predict change and offer exactly what the consumer will want.
“Today’s trade is characterized by internationalization, market consolidation and a relatively high rate of concentration that is approximately 80 percent in the Croatian market, i.e. the leading 10 retailers hold 80 percent of the market. A special challenge for retailers is the development of e-commerce that is yet to peek in Croatia” said Josip Zaher, vice-president of the Croatian chamber of Economy for trade, tourism, and finance . He believes that retail will be facingnew challenges in the following period due to global market changes.
Ema Culi, director of the Trade Department of the Croatian Chamber of Economy reflected on changes in Croatian retail in the previous years. “The growth in retail sales peaked in 2002 at 21,5 percent, then it started to steadily decrease and had the biggest fall in 2009 when the recession came along with the drop in GDP and purchasing power. We recorded a drop of 15,3 percent then. The situation was stabilized in 2011, then we saw a small drop for two years, and only since last year we are seeing new growth, although not significant one” said Culi. The crisis definitely struck harder on the non-food segment of retail, but more importantly, the habits of 90 percent of Croatian consumers significantly changed. The price became a major factor and consumers plan their purchases. Today, more than ever, it is important to create cooperation or even partnership between retailers and suppliers highlighted Culi, adding that one of the key necessary changes is for the retailers to adapt to modern trade patterns.
Since this year marks the 40th anniversary of the magazine Suvremena trgovina, certificates of acknowledgment were given to the individuals who gave their support to the magazine for many years. Ivica Todorić, President of Agrokor Group, Ljerka Puljiić, Member of the Supervisory Board in Agrokor and Darko Knez, President of the management Board in Konzum received certificates of acknowledgment.