by Brook Thalgott
Ensuring that customers find the right product at the right price at the right time is at the core of what Michael Rinaldi, senior vice president of business enablement and enterprise procurement at Loblaw Companies Ltd., does with his team daily.
Rinaldi has a lot of insight to share on what makes the Loblaw approach to procurement and merchandising work for its customers and its stores across the country.
An evolving buying strategy
Key to Loblaw’s success in procurement is its relationships with suppliers. Rinaldi says that they work closely with suppliers, with a buying strategy that is both centralized and transparent. “Our suppliers range from large multinationals to small suppliers,” he says. “No matter the size of the business, we build programs that ensure value and have goals aligned with our stores and our customers.”
When it comes to buying for specific categories, Loblaw’s strength comes from an overall strategy that understands the nuances of products and suppliers. Set up by departments, Loblaw’s strategy allows for teams to have the flexibility they need to make good buying decisions while also keeping customers’ wants and needs front and centre.
Merchandising, and its relationship to procurement, is also vital to Loblaw’s success in the grocery space. The company’s strength comes from how teams work together to deliver what consumers want. The relationship between the two makes the difference. “Our strong data allows our teams to make informed decisions on customer value,” says Rinaldi. “That, plus the diversity of our banners and our tailored programs, deliver what our customers need.”
Customer-driven decision making
However, Loblaw’s procurement and merchandising teams wouldn’t be anywhere without the customers they are tasked to serve. Loblaw’s work is driven by customers and their wants and needs, and those customers have a lot of both.
“Today, we’re seeing more and more consumers prioritizing more sustainable products, more locally sourced goods, and more fresh food innovation in our stores,” says Rinaldi. “And they’re letting us know about these preferences by directly talking to us as well as by what suppliers they are choosing and their overall buying habits.” Loblaw pays attention to these consumer preferences and how they are shaping what their procurement teams source for their stores.
Innovative new products in the plant-based space, new produce choices, more local products and more environmentally friendly items are finding their way onto Loblaw shelves to satisfy current trends with consumers, as well as what procurement teams can see on the horizon. “The Canadian palate is changing, and consumers are interested in new taste profiles,” says Rinaldi. “Therefore, our teams are tasked with finding the great food that our customers want.”
Because of these changing demands, the Loblaw procurement team uses a multifaceted approach to their job. “We view procurement through a consumer lens, and consumers are at the heart of our buying,” he says. For example, if customers are demanding new and different apples and citrus fruits, the team sources those choices. The consumer perspective is central to their procurement and merchandising decisions, ensuring that Loblaw remains responsive to changing preferences and values within the market.
Navigating inflationary pressures
Beyond Canadians’ interest in local, fresh and sustainable choices, they are also driven by price more than ever. With the inflationary pressures on the country’s food budgets, Loblaw is working hard to ensure customers are getting value for their money – even in products where commodity prices may be an issue.
There is collaboration between Loblaw’s procurement and merchandising teams to make timely decisions that benefit customers. They have contingency sourcing plans to navigate situations where commodity prices pose a risk, enabling them to maintain product availability and price stability for consumers. This approach underscores Loblaw’s commitment to delivering value and quality amid fluctuating market conditions.
“We understand that many of our customers are sensitive to prices, and we watch pricing carefully,” says Rinaldi. “The team carefully monitors our data to ensure they can make timely decisions for our customers.”
Loblaw’s recognition of customer cost-consciousness has also led to new promotions. The company introduced “Hit of the Month” in 2024 – a new value-oriented program where products are offered to customers and promoted at “lower than low prices.” “This value-oriented program brings value to both the customer and the supplier,” he says. “In February, we offered Kraft Dinner at 55 cents a box, which was the best price possible in years.”
The work on providing value for money is paying off, with Loblaw seeing more visits and traffic up over the past 12 quarters. “Our customers are noticing,” says Rinaldi. “We strive to be the best in the industry, and we’re constantly working on how we can continue to improve our value for money.”
Delivering on value
The relationship between procurement, merchandising, and customer satisfaction at Loblaw is central to its success, along with its meticulous approach to supplier relationships. Together, they are ensuring value and alignment with customer needs across diverse product categories. With a deep understanding of evolving consumer preferences, Loblaw strategically sources products to meet shifting demands while delivering value to customers nationwide every day.
“Customers want value and choice, and it’s our job to deliver,” says Rinaldi. “It’s really that simple.”
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| Working with Suppliers Announced last November and launched in January 2024, the Small Supplier Program is making it easier for new suppliers to work with Loblaw. The program provides faster payments, streamlined processes and a six-month guaranteed listing period (along with support), so small businesses can work with the Canadian grocery giant. “Small businesses are the lifeblood of our economy, and the path to this country’s successful future,” said Per Bank, president and CEO, Loblaw, in November 2023. “Every day, we experience the terrific power of innovation in many family-owned, traditional and local producers, and we want to assist their ability to develop new products and generate a truly diverse and inspirational range. By making the onboarding and retailing process easier for small businesses, our goal is to reduce their time and costs, to the benefit of all Canadian customers.” |
