Shop Talk

Retailers, consumers and prices

Check Out Line: Suppliers on Kraft chopping block

September 9, 2009

Check out Kraft slashing its supplier base.
Yes, Kraft is doing more than just trying to buy Cadbury.  The company is still operating its business and part of that is the process of looking to improve its margins.
Kraft told Reuters it plans to cut its supplier base to less than half of its 70,000 companies.
“We’re essentially taking a white sheet of paper and saying ‘what is the right number of suppliers to support this particular category, who are they, what is the capability we need for now and in the future, and does the current supplier base have that,’ ” Julia Brown, senior vice president of procurement at Kraft, said.
Suppliers have been under pressure in recent years as companies look to work with fewer vendors that operate more as partners.
The recovery is actually expected to make things worse for some suppliers as they find out they cannot get financing to ramp up operations as their customers start looking to buy from them again.
The winners will likely find even more business as they work closer with companies.
For the loser, it could be “supply-side wreckonomics.”
Also in the basket:
McDonald’s same-store sales up 2.2 percent
Talbots loss narrower than expected
Jewelry retailer Signet profit tops estimates
Speedo extends sponsor deal with Michael Phelps

(Reuters photo)

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