This case study illustrates how our purchasing center supported the transformation of a struggling African supermarket. By using our diverse product catalog, our private label “Belle France“, and our reliable logistics, the supermarket overcame its challenges and became a reference player in its local market.
Background
“Le Bon Choix” (a pseudonym), a supermarket in the heart of a dynamic African city, was facing a set of significant challenges. Located in a densely populated area with enormous potential in terms of clientele, it was unable to capitalize on this opportunity. Several factors were hindering its development and profitability.
First, supply costs represented a major problem. Due to an inefficient supply chain and non-optimized supplier relationships, the supermarket was often faced with high purchasing costs. These high costs inevitably affected the selling prices of products, making “Le Bon Choix” less competitive compared to its local competitors. Moreover, these high supply costs resulted in low margins, limiting the supermarket’s ability to invest in other aspects of its business, such as marketing and infrastructure improvements.
Next, the range of products offered by “Le Bon Choix” was quite limited, mainly due to logistical and financial constraints. This limitation resulted in an inability to meet the diversity of customer needs and preferences. This lack of diversity led to lower-than-expected customer loyalty.
Finally, “Le Bon Choix” frequently faced stock shortages. These shortages were the result of a faulty inventory management system and irregular supply. Customers, unable to find the products they were looking for, turned to competitors, causing significant erosion of the customer base and revenues.
These problems, coupled with increasingly intense competition in the market, placed “Le Bon Choix” in a difficult situation, requiring effective intervention and transformation strategy to put the supermarket back on the path to growth and profitability.
Intervention of the Purchasing Center
Following an in-depth analysis of the problems faced by “Le Bon Choix” supermarket, our team of consultants developed a three-pronged strategy to reverse the trend and put the supermarket back on the path to growth and profitability.
Firstly, we identified the need to significantly increase the diversity of products offered by the supermarket. Our team suggested the introduction of new product categories, with an emphasis on including fresh products.
In Africa, fresh products are a particularly popular category of items among consumers, due to the importance placed on food quality and freshness in the local culinary culture. Fresh fruits, vegetables, meat, and fish are driving elements of a supermarket’s business. However, their management requires rigorous logistics and inventory management to avoid waste. Integrating this product category into “Le Bon Choix’s” offering thus represented a challenge, but also a significant opportunity for differentiation and customer attraction.
Secondly, we recommended the introduction of the “Belle France” brand into the supermarket’s product assortment. With its growing popularity in Africa and its reputation for quality and reliability, the “Belle France” brand was identified as a potential lever to increase the supermarket’s appeal and boost sales.
Finally, the third dimension of the strategy concerned the optimization of logistics to prevent stock shortages. Drawing on our expertise and resources in logistics, we envisioned a complete overhaul of “Le Bon Choix’s” supply system, with a particular focus on managing fresh products, which require rapid turnover and frequent delivery.
Strategy Implementation
By leveraging our ability to provide several thousand product references via multi-product containers, ‘Le Bon Choix’ was able to significantly expand its product range. This allowed the supermarket to offer a greater variety of items, ranging from basic products to more specialized ones, thus meeting a wider diversity of customer needs and preferences.
An essential part of this diversification was the inclusion of an extensive range of fresh products. We encouraged ‘Le Bon Choix’ to focus on this product category, which is often a determining factor in attracting and retaining customers. The addition of fresh products to ‘Le Bon Choix’s’ offering, such as fruits and vegetables, meats, and seafood, helped meet this demand. These products, due to their perishable nature, require more frequent replenishment and rapid stock rotation, which necessitated particular attention in terms of logistics.
Alongside the increase in product diversity, the introduction of the Belle France brand was another major lever in the transformation of ‘Le Bon Choix’. The wide range of products offered by Belle France allowed the supermarket to meet many customer needs, thus enhancing its attractiveness.
Finally, to ensure constant product availability and prevent stock shortages, we implemented a logistics optimization strategy. Through better inventory management, more accurate demand forecasting, and regular replenishment, we guaranteed continuous product availability. This improvement was particularly beneficial for fresh products, which require careful management to ensure their freshness and availability. This not only helped reduce stock shortages but also strengthened customer trust and loyalty, as they knew they could always find the products they were looking for at ‘Le Bon Choix’.
Results
The results of this transformation were notable and rapid, with positive effects noticeable within a relatively short timeframe. By expanding its product range and incorporating a wide variety of fresh products, ‘Le Bon Choix’ successfully met the growing consumer expectations. This dynamic encouraged more customers to visit the store and make their regular purchases there, leading to a significant increase in store traffic.
Alongside the increase in traffic, ‘Le Bon Choix’ also experienced an improvement in its turnover and margins. Within a year of implementing the strategy, the supermarket’s turnover increased by 30%. This remarkable increase was the result of a greater number of customers, increased purchase frequency, and a greater diversity of products purchased, particularly fresh products.
In addition to the increase in turnover, ‘Le Bon Choix’ also benefited from improved margins. Indeed, thanks to the logistical efficiency of our purchasing center, the supermarket’s supply costs were significantly reduced. This cost reduction allowed ‘Le Bon Choix’ to offer more competitive prices to its customers while improving its margins and profitability. This enabled the supermarket to position itself more competitively in the market while improving its financial health.
Overall, the intervention of our purchasing center transformed ‘Le Bon Choix’ from a struggling supermarket into a thriving player in its market. The combination of a diverse and attractive product range, a popular brand, and optimized logistics helped solve the challenges the supermarket was facing and position it on a trajectory of sustainable growth.
