Just curious what people have heard about the connection (if any) between WalMart and Kellogg's decision to end DSD?
The blog by Joe DiStefano on Philly.com mentioned by Velcro several days ago ( @NNu71B6 ) had a brief bit about it: "Is Walmart a factor? The nation’s largest store retailer, which has a big regional warehouse near Bethlehem, has struggled to keep its massive grocery business competitive. The Kellogg’s veteran says Walmart has pressured Kellogg’s and other suppliers to “change our model” and cut the regional centers in order to simplify distribution, in hopes of reducing its own costs." The piece didn't really follow up on this aspect of the situation, though, as it was more about the Pennsylvania layoffs.
My conclusion is that WalMart, in an effort to control backstock levels and cut the cost of purchasing traditionally vendor supplied items, decided to volunteer Kellogg's to participate in this experiment. (WM didn't quite dare to do it to Nabisco--a much worse offender as far as backstock is concerned-- since they're number one in the cookie/cracker category) Kellogg's caved to them since the company has been floundering for the last few years and...TAA DAAAA... we're out of a job.
One of the RSMs I know said he was in a meeting with some of the local WM honchos discussing ongoing service levels. Also in the meeting was the guy who will be the RSM's new DM after August (and currently a MM). The WM dude expressed dissatisfaction with K's projected service level and was told something along the lines of: Well, this is the way your company wanted it.
Thoughts? Rumors?
I know, I know...beating a dead horse, but it would be really nice to know the truth.