Why many organised retailers offering inferior quality products?

Why many organised retailers offering inferior quality products? 

Learning from Tesco UK

Are you planning to go to market today, then take 10 minutes out from your outing and visit any retail outlet of any leading organised retailer of Indian or multinational origin and pl. visit fresh fruits and vegetable counter inside the store.

What to visit?

It will be interesting to see quality of fresh produce at any retail chain in India, specially the sections dealing in fresh fruits and vegetables, fish and meat sections. 

The quality of fresh items are no different them any average retail shop on roadside and very often even inferior than roadside shops.  Also check the price difference between road side stalls and at retailers outlet.

If quality and price both are not acceptable, why one should buy from organised retailers? 

Have you ever though how these prices are fixed in organised retail counters. 

Is there any correlation between their prices and whole sale market prices?

Think about and and do some homework at your end, you will get very interesting inside story. 

Do it yourself, I promise, it will be great fun. 

Why this happens?

I think all organised retail chains are managed by professional managers, whereas all road side outlets are managed by uneducated youths. 

In this case, very often, why quality of products managed by educated managers is inferior to the quality of average shop of uneducated owners?

What can be the reason? Any idea.

This is a very serious issue. Definitely it is not the issue of resources, policy environment or consumer behavior. Organised retailers are better equipped to handle these things compared to road side vendors.

Then what is it?

In my view, it is a mindset issue. It is the lack of desire to deliver good products and good services to consumers. If once in a while poor quality product reaches organised retail outlets, I can understand, but hen we see repeated supply of poor quality stuff in outlets, it raised serious issue of the competency of people managing these businesses. 

Are these supply chain managers incompetent?

I don't know but the quality of products which are available in their outlets definitely saying something about managers and their mindsets. 

Why poor quality product and poor services come to market? What is the motivation in delivering poor quality products to consumers? When so many people are involved in managing supply chain management with vast experience and expertise, why none of them is dare to stop this poor quality supply? Why?

In my view, it happens only in two conditions:

1. Either managers working in supply chain are incompetent or they lack desire to deliver good quality;

or;

2. There is corruption in the system and someone is playing with organisations' goodwill for his or her personal agenda. 

In both the situations, management must take corrective actions in the interest of organisation. If they are not taking action, it is important to understand their mindset and motivation to give poor quality to consumers. 

What is the way out?

When we all know that many of these products are required on daily basis and quality and safety are important criteria, then why we are hesitant in creating long term partnership with farmers. 

Why retailers are keen to involve middlemen in between? 

When management is involving middlemen, unknowingly they are involving people those who have better financial power and bargaining power on ground to corrupt the supply chain system for their commercial gains. You may be saying I am wrong.

If I am wrong, please check what agreement you signed with your supplier and what quality you are getting? Are you getting the same what you signed and paid for.

Why inferior quality is accepted by your supply chain managers. Why? What is their motive? What action you have taken as Head of the organisation?

TESCO UK 's Agreement with farmers is showing the way forward, but will retailers do the same in India as well...

Please read what TESCO is doing in UK.

Over 200 lamb farmers sign two year contracts with Tesco

More than 200 British lamb farmers have entered into direct, two year contracts with Tesco, as part of its long-term commitment to British agriculture, the retailer announced today. The contracts represent the first time a major UK retailer has offered formal, two year direct contracts with lamb producers.

The contracts, which have been offered to farmers in conjunction with Tesco's principal processing partner St Merryn, part of 2 Sisters Food Group, follow a similar contract offer to beef farmers, announced by Tesco in December.

The contracts include a premium above market price for lamb, with all farmers forming part of the Tesco Sustainable Lamb Group, which aims to develop and strengthen Tesco's relationship with its farm suppliers.

Lambs will be born and reared on farms that form part of the Red Tractor Farm Assurance Scheme, which ensures high welfare and production standards. The 200 farms will help supply Tesco with lamb for its finest* range, between April and December, when British lamb is best in season. Working with St Merryn, Tesco will look to extend the contract offer to more lamb farmers in the coming months.

Richard Marris, Commercial Director of Fresh Foods at Tesco said: "The uptake of the contracts so far shows that sheep farmers are keen to work with us in building stronger, closer relationships between Tesco and British agriculture. We recognize this is one measure of progress, but we're excited to be working together with farmers to bring quality, fresh food from British farms to our customers. We hope these contracts will play an important part in giving sheep farmers the confidence they need to invest and plan for the future."

Farmers from across the UK have already signed up to the scheme: 

John Maynard, whose farm in Devon will benefit from the agreement, said: "It is very encouraging that Tesco are making long term commitments to lamb producers. Knowing I will be getting a premium for my lambs gives me an extra incentive to invest in my flock and continue to produce top quality finest* lamb from the South West."

Warren Davies, who supplies finest* lamb from his farm near Abergavenny in the Welsh Uplands also welcomed the commitment from Tesco: "Knowing that Tesco have committed to Welsh finest* lamb has given my son and I greater confidence as we know that if we market our lambs during the finest* Welsh period we will receive a premium for producing top quality PGI Welsh Lamb. This commitment from Tesco to Welsh lamb will help us develop our business as we know that the premium has been guaranteed for the next two years."

Original source: Tesco

One thing is clear, if Retail chains want they can take corrective steps to improve quality of supplies. Can we think of similar initiatives in India by these professionally managed Retail Chains? 

In order to address these issues without much hassles , it is important for Retailers to have close working relation with Agriculture Input and Livestock Input companies.

Agriculture & Livestock companies have expertise to understand farmers in India, Retailers should have good professional relationship to utilize their services so that quality and traceability issues can be addressed. This is in the interest of Retailers to avoid many quality related legal issues and consumer problems in coming days. 

Let us wait and see...how ground situations will improve after FDI in multi-brand retail. Their action in coming days will indicate about their commitment for India's consumers as well as Indian farmers. This is very much doable in India as well - "Where there is a will, there is a way."