---
title: "Managing the Pace of Price Wars in Retail Outlets"
description: "A salesperson for a well-known snack food company faces the challenge of their products being frequently used by a local KA store for price wars, which harms their interests and relationships with other stores. The key to handling this issue lies not in specific actions but in mastering the pace of resolution, akin to treating an illness with a proper course of treatment."
author: "黄静"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2016-07-21"
language: "en"
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# Managing the Pace of Price Wars in Retail Outlets

> A salesperson for a well-known snack food company faces the challenge of their products being frequently used by a local KA store for price wars, which harms their interests and relationships with other stores. The key to handling this issue lies not in specific actions but in mastering the pace of resolution, akin to treating an illness with a proper course of treatment.

**Case:** I am a salesperson for a well-known domestic snack food company, responsible for sales in local KA stores. Because our brand is well-known in the local market, the store's buyer often uses our products for price wars. How should I handle this situation? Our products being frequently used for price wars not only seriously damages our legitimate interests but also affects our relationships with other stores. Is there any good way to prevent this from happening?

Using suppliers' products for price wars due to their local market popularity is a common issue that many supplier salespeople encounter, and it is one of the problems in the supplier-retailer relationship. For suppliers, such issues are naturally troublesome. However, the key to handling this matter lies not in specific actions but in mastering the pace of resolution.

In fact, handling issues between suppliers and retailers is like "treating an illness" in daily life. No illness can be cured with a single dose of medicine; rather, patients need to follow the doctor's treatment plan. Any problem between a supplier and a retailer can be seen as an "illness." Every illness has its root cause, but to cure it, one must master the treatment course. Many suppliers fail to grasp the treatment course, being too eager for quick results, which only deepens the problem. Fundamentally, problems between suppliers and retailers do not occur overnight, nor can they be solved overnight. Doing business with retailers is not a "one-day affair" but a long-term process. Since business is continuous, problems are also continuous. Therefore, if suppliers cannot find solutions from the "root," they will only be treating symptoms, not the cause.

**How Suppliers Should View Disputes with Buyers**

Suppliers doing business with retailers will inevitably encounter various problems. Therefore, suppliers should not fear "disputes" with buyers but should adopt a mindset of "problems will always arise, and we handle them as they come," following established "procedures."

**"Stay Calm"**

When a dispute arises, the supplier must first stay calm and view the dispute objectively. In fact, many disputes between suppliers and retailers escalate to an uncontrollable point because suppliers cannot stay calm and are too eager to resolve the issue. "Eat rice one mouthful at a time, walk the road step by step, and solve problems one by one." Do not fly into a rage, lose emotional control, or become frantic and noisy when a problem occurs. This not only fails to solve the problem but also easily ruins things. At any time, when a problem arises, stay calm! Being steady and unflustered is the prerequisite and key to solving problems. Remember, impulse is the devil. Is your purpose to vent anger or to solve the problem? If you vent anger and ruin things without solving the problem, what's the point?

**Analyze the Problem**

After a problem or dispute arises, the supplier should rationally analyze the causes: which are due to the retailer, and which are due to themselves. Do not try to attribute all causes to the retailer. Even if you are truly the victim, it shows that your prevention and management have loopholes, which is also a problem! Analyzing and identifying the root cause is the prerequisite and foundation for formulating solutions. Only by finding the root cause can you provide targeted solutions. Otherwise, you will only be "treating the head when the head hurts, and treating the foot when the foot hurts," easily leading to chaos and panic. Suppliers should quickly formulate a solution approach and process for the problem. Remember, solving a problem is a process, not a single point.

**How Suppliers Should Handle Retailers' "Price Wars"**

**Maintain the Right Attitude**

For retailers, the supplier's attitude toward "price wars" is crucial. In fact, many suppliers are not clear about their attitude toward price wars, even being half-hearted, and do not show retailers any danger or pressure, so retailers do not restrain themselves. They just do it; what can you do? If the supplier clearly states in advance that they have their own plans for sales promotions and absolutely will not tolerate such "price wars," and have very clear countermeasures, and even have fought a few real battles to teach the retailer a lesson, the retailer will remember and clearly understand the supplier's firm attitude, feel the pressure, and become more cautious. Even if similar "price wars" occur in the future, there will be more room for handling the matter. Retailers treat customers according to their type. If you are treated as a pushover, it's because the retailer thinks you can be pushed around, and it's no big deal.

**Build Good Relationships**

Generally, buyers tend to choose products from manufacturers with whom they have average relationships for "price wars." For partners with good relationships, buyers will be more cautious. Therefore, if the supplier has a good relationship with the buyer, even if the retailer intends to start a "price war," the buyer will often tip off the supplier in advance, allowing the supplier to prepare. Conversely, if the relationship is poor, the buyer may use the "price war" as an opportunity for revenge. So, when a price war occurs, it is important to distinguish whether it is purely a retailer action or a personal action by the buyer.

**Give Retailers a Reason Not to Engage in Price Wars**

Why do price wars happen? Ultimately, it's for sales volume! If suppliers cannot provide retailers with better promotional plans than price wars to boost sales, retailers will naturally resort to price wars—discount promotions are the simplest performance logic. Therefore, instead of constantly guarding against price wars, suppliers should spend more effort designing better promotional activities to increase sales. If you have good sales performance, retailers won't bother thinking about price wars; wouldn't buyers prefer an easy life?

**Responding to Retailers' "Price Wars"**

1. Prevent "price wars" by controlling inventory. No matter how they price war, they can't sell without stock.
2. "Leak-filling" measures: Buy back goods as quickly as possible to quickly balance the interests of other stores.
3. Summarize in a timely manner and develop feasible contingency plans.
4. Provide timely training and education to sales personnel.

When problems arise in retail outlets, suppliers should not try to solve them in one step. As the saying goes, "Haste makes waste." There are many ways to solve problems, but there is no magic cure that works instantly. Therefore, suppliers must not be impatient and should learn to use methods—by effectively mastering the "pace" of problem-solving to resolve issues step by step.

Author: Huang Jing

Huang Jing, expert in retail back-end system design and researcher on supplier-retailer relations. With over ten years of professional procurement experience, from large state-owned retail enterprises to foreign hypermarkets, she has served as procurement section chief, procurement manager, procurement director, and training director, possessing a relatively complete career experience in the modern retail industry. She has conducted in-depth research on supplier-retailer relations, especially systematic research on procurement issues, negotiation issues, cost issues, contract issues, and various conflict resolution issues that suppliers care about.

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