Contract Distribution in Multiple Retailing

Distribution has been a major element of retailers′ marketing strategy in recent years as companies strive to control costs but at the same time seek competitive advantage through improving service to stores and gaining greater control of stock in the supply chain. In an interview survey of distribution directors from major multiple groups,all companies were reviewing their distribution strategy and many had made major changes to their distribution system. Centralisation of stock in strategically located RDCs and the use of third party contractors were main features of retail companies′ strategy. Contractors were much more aggressive in marketing their services to retailers than hitherto. This is partly related to the competitive and turbulent nature of the industry. In a survey of marketing directors/managers of distribution companies, it was clear that firms were trying to raise their profile in the market as they “went public” and/or because they were moving into new industry sectors away from their “core”specialist areas.