The Impact of Category Management on the Retailer–Supplier Coopetitive Relationship Within Private-Label Food Projects

Abstract

Introduction: This research explores the influence of category management (CM) on the dynamic between retailers and suppliers, specifically within the context of private-label (PL) new food product development (NFPD) in the Saudi Arabian grocery sector. It addresses the interplay of cooperation and competition, known as coopetition, in this relationship.

Objectives: The primary purpose of this study is to investigate how CM affects the power balance within the retailer-supplier relationship in PL NFPD. A key objective is to develop a deeper understanding of how this coopetitive relationship ultimately impacts the level and success of innovation in the market.

Methods: A case study methodology exploring eight PL NFPD projects was employed that used semi-structured in-depth interviews with 32 participants from seven Saudi firms within the fast-moving consumer goods industry. Data were analysed using the thematic approach.

Results: The findings reveal that as both suppliers and retailers strive to protect their respective brands from competitive exclusion, it escalates "fighter behaviours" between them. This heightened tension inhibits the realization of the intended benefits of Category Management and, crucially, acts as a significant barrier to innovation within the NFPD process.

Conclusions: This study is understood to be the first empirical research of its kind focusing on Saudi firms, providing original insights into how CM is used by retailers to assert power over suppliers in PL food projects. Practically, it offers valuable insights for retail decision-makers on managing power tensions and resolving conflict to achieve mutual benefits and reduce the failure rate of PL NFPD projects.