Fruits of Thought
Danger: Slotting Fees Ahead
Until recently, the produce department has been an island of tranquility as turmoil over slotting fees bubbled up around it. But with the growth of branded produce and these firms’ continuous need for outlets for their produce as well as supermarkets’ continuing desire to increase revenues, some think that the age of the slotting fee in produce is near at hand.
The whole idea of slotting fees, basically payments made by suppliers to ensure a certain amount of display space at retail, has the potential to dramatically alter the way produce is purchased and merchandised. A lot depends on how it all works out, but there is a minefield of issues to be resolved:
The great buyers and merchandisers of produce are the ones who are most flexible, the buyer who catches an extraordinary lot of peaches and gets it at a bargain price, the merchandiser, who seeing the peaches, changes his display plan to make them more prominent. All for the purpose of serving the consumer by offering produce they want to buy.
If the produce industry can no longer simply serve the consumer, but instead must serve two masters, the consumer and the contractually committed space, it may serve neither well. The produce department could become boring and restricted. And those excellent peaches at the bargain price will remain in their original slot, barely seen, barely purchased, barely eaten. What a shame. pb