PG EXCLUSIVE: Wal-Mart, P&G Top Cannondale's New PoweRanking

WILTON, Conn. - Wal-Mart and Procter & Gamble have been identified as the "best of the best" in Cannondale Associates' 2006 PoweRanking Survey, an annual study that measures how adeptly leading manufacturers and retailers handle working trade relations.

Titled "The X Factor," the 2006 PoweRanking report underscores the continued need for collaboration between manufacturers and retailers to meet consumer and shopper needs, particularly in the key areas of store layout and item assortment, customized packaging, and promotions and shopper segmentation.
(Story continues below.)

"This year's PoweRanking survey once again identifies those manufacturers and retailers who deliver best in class performance across a spectrum of business metrics in the eyes of their trading partners," noted Ken Harris, managing director of Cannondale, in a statement. "This year, more than ever, the idea of collaboration is the currency of greatest value between trading partners, now that the consumer is in full control of the what, when, and where of the purchase decision. Manufacturers and retailers need each other to best address consumer needs."

For the eighth consecutive year, Wal-Mart captured the top slot among retailers, but fell 5.5 points, continuing a silde that started to befall it in 2004. Wal-Mart is followed in the ranking this year by Target, Kroger, Costco, Publix, Wegmans, H.E. Butt Grocery Co., Safeway, CVS Corp., and Whole Foods, in that order.

This year's PoweRanking shows a polarization of retailers, with those operating at the low and high ends showing the strongest gains, and retailers who stay in the middle getting left behind, Cannondale noted.

Safeway made notable improvement in this year's ratings, for example, driven by a concerted effort with the Lifestyle format and a focus on consumer segmentation.

"Retailers that demonstrated savvy in marketing and a spirit of cooperation fared best in the PoweRanking this year," Harris said. "Retailers are even more interested in understanding their shoppers and working with manufacturers to address shopper needs based on factual analysis."

The ranking criteria for the retailers included:

-- Clearest company strategy
-- Best at store branding
-- Projected power retailers
-- Best retailers with which to do business
-- Best category management/buying teams
-- Most innovative consumer marketing/merchandising
-- Best supply chain management
-- Best practice category management/CMAR

Among manufacturers, Procter & Gamble solidified its No. 1 positioning in 2006. In addition to Procter & Gamble, PepsiCo, Kellogg, Unilever, and Kimberly-Clark also improved their PoweRanking composite score. Kraft remained the No. 2 manufacturer, despite a slight drop from 2005, and PepsiCo entered the No. 3 spot. Leading-edge consumer insights and category marketing programs drove PepsiCo's improved perception. Kimberly-Clark has reemerged in the top 10, while Clorox dropped out.

"Performance by manufacturers like P&G, PepsiCo, Unilever, Kellogg's, and Kimberly-Clark are particularly noteworthy in that the performance improvement was across the board for these companies," Harris said. "It wasn't in just one or two areas where these organizations improved. This is a noteworthy achievement."

The composite scores are based on rankings in eight key areas where manufacturers interface with retailers. The eight metrics are:
-- Clearest company strategy
-- Most important consumer brands for retailers
-- Best combination of growth and profitability
-- Best sales force/customer teams
-- Most innovative marketing programs
-- Most helpful consumer/shopper insights and category management
-- Best supply chain management
-- Best shopper marketing programs

This year consumer insights and category management were combined into one measure, reflecting the retailer perception that these factors are inextricably linked. A new metric, shopper marketing programs, was added because manufacturers and retailers have moved beyond traditional program development to a more tailored research approach that is targeted at retailers' shoppers, according to Cannondale.

Cannondale Associates is a sales and marketing management consulting firm with offices in Wilton, Conn. and Evanston, Ill. and is part of Kantar and WPP.
This ad will auto-close in 10 seconds