Manufacturers 'could bypass small firms'
Jun 01 2009
Increasing use of price wars could cause manufacturers to avoid supplying small retailers and deal directly with the consumer, it has been claimed.
According to a report by digital strategy consultancy Echo E-Business, manufacturers may start to concentrate on distributing their goods to larger, more established retailers to avoid them being sold at low prices.
Deborah Collier, managing director and chief strategist at the organisation, claims that selling products at just above the distribution price can place stress on firms which produce them, as they fear it could damage their brand image.
She also suggests that this could lead to manufacturers attempting to sell directly to the consumer by establishing an online presence.
Collier adds: 'I've seen a marked rise in manufacturers wishing to sell directly to customers, as well as maintaining the relationships with quality retailers.'
Recent figures from the Confederation of British Industry showed that 48 per cent of retailers experienced decreased year-on-year sales in the first half of May, compared to 31 per cent who reported a rise.
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