Summary
Industry leading retailers are seeking cost reduction opportunities line item by line item. Fixed costs such as rents are only one potential cost reduction initiative.
Analysis
Retailers are pointing to their attention to back office functions such as transportation, risk management, and procurement.
ü According to the American Trucking Association, common carrier volumes are down 1.3%. Retail transportation managers will leverage this reduced capacity by improving delivery reliability.
ü Risk management models are under the microscope. Risk managers are reviewing documentation and disclosure formulas as an initial first step.
ü Acquisition executives are analyzing procurement methodologies such as e-Sourcing and group purchasing organizations.
