CINCINNATI -- Retailers always seem to cheer when they hear about one of their own challenging preconceived notions about stocking shelves, particularly those promulgated by suppliers, and especially if the challenge is successful.
"We need their advice, but we've got to run our stores ourselves" is a frequent refrain from retailers.
So I imagine beverage retailers will be watching Kroger Co. closely in coming months.
The grocer--the largest supermarket chain in the United States--is changing the way it organizes beer, wine and liquor on its store shelves. The Cincinnati-based chain also owns and operates nearly 800 convenience stores in 19 states.
According to a report inThe Wall Street Journal, "The proposal would do away with a decades-old system in which the biggest alcohol producers ... were tapped by Kroger and other grocers to be category captains, dispensing advice and influence about how much shelf space and prominence to give brands ranging from Budweiser to Robert Mondavi to Smirnoff.
"Instead, the plan, introduced late last year, calls for a privately held distributor, Miami-based Southern Wine & Spirits, to oversee how much display brands get in the grocery aisles of the more than 2,600 Kroger stores in 29 states."
In an added bit of defiance--the kind of move only a major retailer could propose--Kroger also is asking the alcohol suppliers to pay Southern for the service.
The ultimate goal is to provide space to the products that truly deserve it, to "better respond to customer needs and more quickly bring new, innovative adult beverages to market," a Kroger spokesman told the newspaper.
This adds up to fees for the brewers, The Wall Street Journal said, "based in part on how much volume a store carries," a prospect that is raising the industry's hackles.
And ironically, a system designed to bring new and innovative products to market faster is actually being decried by smaller brewers, who fear a "pay-to-play" system. “For a start-up company, good luck trying to get into Kroger with this plan,” Paul Gatza, director of the Brewers Association, which represents craft brewers, told the newspaper.
And so I join the rest of the retailing industry, convenience stores included, to watch and see if a viable alternative to drawing plan-o-grams is on its way.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.