Darrell Lea resellers yesterday received a fax from the company outlining some changes. They have cut some products, changed trading terms and appointed a another company to handle distribution.
The reduction in product will leave the current Darrell Lea stands with spare space. Some of the cut lines will be missed y some retailers.
It’s the change in markdown policy that is causing the most concern. retailers accepted the low Darrell Lea margin because on a reasonable markdown policy. The policy is: no markdowns, credits, rebates or settlement discounts.
They say the new terms provide greater transparency. No they don’t. They say the new terms aim to build a stronger business relationship. No the don’t.
I suspect the changes will cause some retailers to quit stocking Darrell Lea and seek out an alternative.
The announcement provides no confidence of consultation with the people facing customers every day stocking and promoting the Darrell Lea product.
Mark you are so so right! I received the fax yesterday and I was shocked at the lack of insight on exhibition into how the confect business works in store.
The only thing that was ever keeping us stocking Darrell Lea was the ability to claim markdowns when expiry dates loom.
There is no way I can take on that risk while ever there is such a measly gross Profit in the product.
Heavens above. I could mark it down by the whole GP and maybe still not move it all if I got stuck with a lot of gear.
The only way I can see we could continue is if there are flexible expectations from DL regarding the width of range we stock. We find DL is quite seasonal. Seasons good. Everyday pretty ordinary. If we can stock a very tight range of proven sellers, and participate in the seasons I will consider it.
Even then, if I end up stocking only 8 or 10 lines, it is a poor range for customers and being a DL stockist will take on a new meaning.I
am very interested to hear what others think. I am a medium sized newsagency in SE Qld.
Same goes here Bruce. Your sentiments reflect our own. The return is not great let alone the chance of being further out of pocket. We are reconsidering the DL in our store.
We too are a medium sized store in a neighbourhood centre in SE QLD (FNQ when it comes to some magazines…LOL)
Cheers
Al
The drastic reduction of the range is something I would have expected but not to this level.
If you stock Easter markdowns are essential as there is always some stock left over and it certainly helps to clear anything left over afterwards. A lot of customers even wait until the 50% period starts to buy extra.
I can understand the new owners going through the range and cutting off slow selling lines and looking at efficiencies and what have you but I think the knife might be a little too sharp at this stage. There was comment somewhere that they may introduce some new lines and I would be really interested to see what those line are.
I hope there is no playing around with the taste of the product as it seems to strike a chord with those loyal customers who have been buying it for years.
I have the large three bay unit a couple of stands in the shop and would easily move around 2 pallets of product during Easter. I will be watching this very closely.
I am a Darrell Lea franchisee in Victoria. I have a wholesale subagency network of around 25 small businesses. One solution to the problem of no credits or markdowns could be to buy from one of the 25 Darrell Lea licensees/franchisees that will ship out in units quantities rather than full outers. From a stock management perpective it is easier to control 6 Rocklesa Roads rather than a full outer of 18? If you are interested I can provide details of the DL licensees.
I note in the fax that they mentioned future specials on product and also as a throwaway line that they may put some lines into coffee shops. This leads me to wonder whether they have yet formulated a proper plan for distribution.
i regret I may decide not to be part of that DL future.
Darrell Lea will be on supermarket shelves between Cadbury and Pet food. Less branding and marketing, more bulk selling through the big supermarket chains. Thats my take on the whole shamozzle.
Mike, could i please have the DL franchisee details.
thanks
Hi Meesh0
To find details of the old DL franchisees please refer to dlea.com.au website and the store locator. Search for stores with FULL RANGE.
Happy to talk offline but I’m not sure how to facilitate it.
regards
Thanks mike,
give me a call on 9391 2548.
My name is also mike, from newport newsagency.
cheers
The new owners of Darrell Lea have today announced a deal with the IGA chain that will see their products on IGA shelves before Christmas. That will put a dent in our pudding sales!!!