Making Procurement a Priority

Insights from A.T. Kearney's Excellence in Procurement Study of the Retail Industry

Every month, it seems, another retailer posts disappointing financial results. Top-line growth sags; bottom-line profitability erodes. Hypermarkets drive down prices, pharmacies cut into grocery sales, discounters invade malls. In today’s hypercompetitive retail environment, no company is safe. All retailers need to find new ways to create value.

To drive the excitement and top-line growth that sustains the industry, CEOs must grow their businesses and, at the same time, deliver superior return on invested capital. How can CEOs deliver more profitable and customer-focused growth? A.T. Kearney believes CEOs should look more closely at their merchandising and procurement functions, with close regard to the following questions:

• How well integrated are merchandising and procurement?
• How successful has procurement been in reducing costs while simultaneously building collaborative relationships with strategic suppliers?