Scroll to the end of the article for a conversation with Armand on the role of a produce buyer.
If you’ve read much of The Packer or PMG, you’re probably familiar with Armand Lobato, our resident seasoned veteran best known for his insightful columns on the role of produce manager. Well, he also spent years as a produce buyer, so we wanted to get his perspective on the key areas of the job and advice for people new to that role.
In our last article on produce buying and the nuances of seasonality, Lobato described the pressure from upper management to be first to market with seasonal favorites. Another common pressure buyers often face is regarding price.
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“Gross profit targets can be problematic,” Lobato said, noting that pressure to price higher can slow down sales. “When you slow down sales, that means everything slows down in the pipeline. You don’t have as much produce coming in, it takes longer to get through your warehouse, it takes longer to go through the store, and ultimately it’s not as fresh. In theory, yeah, you make a little more money, but there’s an old saying: a fast nickel is better than a slow dime.
“You want to be as aggressive as you can and have as low a gross profit percentage as you can stand because you’ll be turning that inventory quickly and ultimately you take more money to the bank — because you don’t take percentages to the bank, you take money to the bank, and that’s always a difficult message to send up the hierarchy to that vice president who wants to have a certain gross profit percentage,” Lobato said.
“I’d rather see a chain that is aggressive in their pricing, that’s turning over a lot of produce. I would rather have an endcap of something at 30% profit that is turning two or three times a day on an endcap versus something that’s 50-plus percent and it might turn once a day," Lobato said.
That approach also results in fresher product for the consumer, which will contribute to a strong impression for the produce department as a whole.
“You want the benefit of the shelf life to be in your customer’s crisper,” Lobato said. “You don’t want something to sit in your warehouse too long.”
Of course, many produce buyers might not have the opportunity to make the call on pricing. Even so, it makes sense for people in this role to be aware of the strategy, to watch and see what competitors are doing, and to be ready with ideas on how to increase movement in case the chance comes to chime in on that bigger-picture discussion.
For more conversation on produce buying, watch the video below. Also, new produce buyers and aspiring produce buyers can find a free resource here on key areas of the role to keep in mind.
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