Executive Summary: Cooperation and Competition in Retailer-Supplier Relationships

In the mid-90’s, one grocery retailer noticed that unpacking and putting tomatoes on display was labor intensive and caused a lot of shrinkage from all thathandling of the delicate fruit. They worked closely over a period of months with their primary supplier to design new packaging–a single layer, store-ready box that reducedlabor and shrink. During that process, the supplier came up with several ideas that reduced the cost of the packaging andreduced shrinkage in transit because the tomatoes were better protected and better ventilated. By involving the supplier rather than simply dictating, the retailer created a winwin situation.