Retailers put limited emphasis on buying NFR professionally. They therefore miss an opportunity to gain 70 basis points of margin.
Over the last few years, KPMG have supported leading retailers in reducing their procurement costs in both 'For Resale' and 'Not For Resale' spend, all over the world. During these engagements, we noticed that retailers were putting limited emphasis on buying Not For Resale spend professionally, despite it accounting for 8–14% of the total cost base. We also noticed that all retailers faced challenges in implementing the right sourcing strategies for Not For Resale products across international operations. Most discussions focused on whether a product or service was being bought globally/regionally or locally. As a result, most of the retailers were 'stuck in the middle' and NFR procurement was not delivering the value necessary to remain competitive.
Based on a number of different KPMG engagements, and research conducted on 25 International Global Grocery Retailers, this document provides an insight into how retailers can increase their profit margin (by 70 basis points) through professional Not-For-Resale Procurement.