Wal-Mart and P&G Rank ‘Best of the Best’: PoweRanking

Cannondale Associates released results this week from its tenth annual PoweRanking Survey, and has found retail giant Wal-Mart and consumer packaged goods conglomerate Procter & Gamble take top scores when it comes to meeting consumer and shopper needs.

“This year’s PoweRanking survey once again identifies those manufacturers and retailers who deliver best-in-class performance across a spectrum of business metrics in the eyes of their trading partners,” said Ken Harris, Cannondale managing director, in a statement released Monday. “This year, more than ever, the idea of collaboration is the currency of greatest value between trading partners now that the consumer is in full control of the what, when and where of the purchase decision. Manufacturers and retailers need each other to best address consumer needs,” Harris said.

For the eighth consecutive year, Wal-Mart captured the top spot in the retailer ranking, but it continues a downturn that began in 2004, falling 5.5 points. This year’s PoweRanking shows more pronounced polarization among retailers: Those operating at the low and high ends showing the strongest gains, while retailers in the middle are getting left behind. Safeway made notable improvement in this year’s ratings, driven by a concerted effort with its Lifestyle format and a focus on consumer segmentation.

“Retailers that demonstrated savvy in marketing and a spirit of cooperation fared best in the PoweRanking this year. Retailers are even more interested in understanding their shoppers and working with manufacturers to address shopper needs based on factual analysis,” Harris said

Retailers (see chart) were ranked on the basis of:

• Clearest company strategy
• Best at store branding
• Projected power retailers
• Best retailers with which to do business
• Best category management/buying teams
• Most innovative consumer marketing/merchandising
• Best supply chain management
• Best practice category management/CMAR

Among manufacturers, in addition to Procter & Gamble, such brand companies as PepsiCo, Kellogg, Unilever and Kimberly-Clark achieved high composite scores. For the second consecutive year, Kraft held the No. 2 spot behind P&G, despite a slight drop from 2005. PepsiCo entered the No. 3 spot on the basis of a perceived improvement in consumer insight development and category marketing. Kimberly-Clark returned this year to Top 10, while Clorox dropped out.

Entitled The X Factor, the 2006 PoweRanking report highlights manufacturers and retailers that have performed well over time. It identifies companies that are leading advances in store layout and item assortment, customized packaging and promotions and shopper segmentation.

The composite scores are based on rankings in eight key areas where manufacturers (see chart) interface with retailers:

• Clearest company strategy
• Most important consumer brands for retailers
• Best combination of growth and profitability
• Best sales force/customer teams
• Most innovative marketing programs
• Most helpful consumer/shopper insights and category management
• Best supply chain management
• Best shopper marketing programs

This year, consumer insights and category management were combined into one measure, reflecting the retailer perception that these factors are inextricably linked. Cannondale analysts added a new metric, “shopper marketing programs,” because manufactures and retailers have moved beyond traditional program development to a more tailored research approach that is targeted at retailers’ shoppers.

For the survey, Wilton, CT-based Cannondale mailed questionnaires this past spring to retailers and wholesalers in food, drug and mass merchandiser channels and manufacturers in food, general merchandise and HBC. To provide trended information over time, the company’s measures are calculated on a rolling two-year basis.

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