Value creation in category management relationships in the UK grocery market

This thesis explores the nature of value, and value co-creation within the context of collaborative category management relationships in the UK grocery sector. Category management is the process which involves a collaboration between food manufacturers (suppliers) and retailers to manage the needs of shoppers. Research into category management is very timely as the retailing industry is currently facing one of its greatest challenges. Shoppers are becoming more demanding and expect better value from their purchases. The research reveals that shoppers are switching from branded to private label products following on from the recent success of Discounters. This has created opportunities for all category suppliers including private label and smaller niche suppliers, if they produce retailer specific innovative and creative ideas. It was also found that the role of the category captain was abandoned five years ago, despite being the focus of the category management literature even today. The role now known as ‘preferred supplier’ is available to any category supplier and is no longer the exclusive right of the largest branded supplier. The current research study has involved UK based food industry supplier category managers and retail buyers, to understand if category management collaborations created value. Following a phenomenological approach using long qualitative interviews, the findings were controversial in that both the suppliers and retailers were not completely satisfied with the category management relationship, and that value was not always created. This finding contradicts existing research, and indeed the rhetoric that normally purveysin practice. The researcher anticipatesthat the thesis will alert practitioners to the underlying issues that exist and encourage them to find ways of working closer together, without fear of displeasing the other partner. It will no doubt spark reformist debates between suppliers and retailers, as well as update the category management literature. The research findings move the category management conversation forward from an objective to a subjective explanation of value creation. Finally, it introduces the importance of Service-Dominant Logic S-DL in creating value through the lens of the five axioms of S-DL. It also adds further insight from a supplier’s perspective based on confidential testaments of practitioners on the front-line.