One of the most important facets of operating a c-store is determining which vendors to work with. As new products enter the market and vendors reach out, retailers need to decide where best to focus their time and money. It’s crucial to take careful consideration when negotiating supply contracts.
CStore Decisions reached out to Mario Spina, owner and CEO of The PRIDE Stores, which has 17 stores in Illinois and Indiana, to get his take on entering into new supplier contracts.
CStore Decisions (CSD): What factors do you consider when deciding to enter into a contract with a new supplier?
Mario Spina (MS): The most important items are necessity and profitability. Well over a dozen new suppliers reach out monthly to work with The PRIDE Stores, but we already have numerous long-term suppliers in our network. Convenience stores are receiving more “first to market” plus new/hot items, but some are from suppliers we do not currently work with. If it is determined that these items are necessary, we will bring in a new supplier if the pricing is in line.
CSD: Are there specific criteria or trends you look for when selecting new products?
MS: In short, no. We are seeing more and more customers wanting to try an item once, then move to the next new thing. In order to keep our customers engaged, we can’t follow one trend. We need to keep our fingers on the pulse of every single trend, from foodservice, to alcohol, to nicotine and now tetrahydrocannabinol (THC).
CSD: What qualities or attributes do you value most in supplier relationships?
MS: Pricing and service. We have great relationships with many suppliers that span over two decades, and as long as they can keep their service and price in line, we can work with the rest.
CSD: What are some typical terms and conditions included in your supply contracts?
MS: That’s quite a loaded question. Nothing is ever “typical” with supply contracts aside from they want (us) to commit to buying as much as possible, sell as much as possible through us and have the largest footprint in the store.
CSD: How do you collaborate with suppliers on marketing and promotional activities?
MS: Every supplier is different.
CSD: What role does technology play in optimizing your supply chain operations?
MS: It has been a difficult conversation; many of our suppliers are now pushing us to use their software to place orders vs. utilizing their sales force. Some are great, while others are proving to be a difficult learning experience. When the product can’t get purchased properly, it can leave holes in the sets along with price fluctuations that both severely affect the bottom line.
CSD: What trends do you foresee impacting how you negotiate and manage supply contracts in the future?
MS: Everything has gotten a lot tighter — from marketing funds to margins.
