Tension between food retailers and manufacturers is set to reach its peak in the next six months as retailers push for price reductions, Supervalu CEO Jeff Noddle has predicted.
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Speaking during a conference call to discuss the US supermarket’s fourth-quarter results, Noodle said that retailers are likely to up the pressure on food companies to cut prices as the economic downturn leads to reduced consumer spending.
However, Noodle added, manufacturers are likely to continue to resist such moves.
“I look at the first six months as being the battleground,” Noddle said.
Noddle predicted that ultimately the retailers would come out on top.
“I don’t think they [manufacturers] are going to be able to hold that very long,” Noddle said. “I think they are going to be forced initially into more trade spending and then ultimately bringing prices down.”
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By GlobalData
