What to Do When Your Merchant Has a Bad Quarter


Between the rising costs of raw materials, inflation, and lukewarm consumer sentiment, times are tough for retailers these days. Many categories experienced disappointing growth last quarter, generating frustration (and in some cases, panic) for the merchants responsible for these retail spaces. 

If your merchant comes to you with concerns about stagnant growth or negative comps, view it as an opportunity to seek a solution together. Just like any other relationship, a stressed and worried merchant needs reassurance, cooperation, and actionable strategies designed to yield quantifiable results.


1. Level Set. 

If you’ve had a bad quarter, it’s important to understand the macro. Start by studying the factors that are impacting the larger economic situation, trends in consumer behavior, and your category as a whole. From there, you can zoom in to look closely at what is going on at the store level. 

Is traffic down? Has there been an overall dip in sales? Get a firm grasp of the larger circumstances impacting your brand’s performance, and present this context to your merchant. Negative comps can turn into a positive if you’re still outperforming your category competitors in a down market. 


2. Focus on Your Wins.  

When any relationship hits a rough patch, it’s smart to help your partner remember the good times. Think about the programs and strategies that have worked well in the recent past, and bring those to your merchant’s attention as the basis for a path forward. 

If you have a history of innovation, successful collaborations, or proactive responses to past issues, be prepared to explain the tangible results of your efforts. Quantifying your wins will help your merchant understand that you aren’t just offering platitudes — you have the tools you need to rise above challenging circumstances. 


3. Highlight Your Efforts and Investment.  

Remind your merchant that you’re all in on their program — and willing to get creative and adapt when the goalposts move. 

Ideally, you are attuned to red flags in your POS data and performing regular store walks to gather insights that can help you start formulating solutions before your merchant asks for them. Coming to the table with strategy will put your merchant’s mind at ease and position you as a true partner at retail. 

Offer specific, data-based solutions. Do you have upcoming promotions that respond to a shift in consumer behavior? Are you making necessary changes to your assortment? Maybe you’re accommodating an increase in Pro customers by adding pro packs or combo packs. Demonstrate that you know where the landmines are and are prepared to meet challenges. 


4. Talk About a Positive Future.

You can’t change a bad quarter that has already happened, but the actions you take now will directly impact the future. Talk to your merchant about what you see coming down the road in your category, both on the macro and store level. 

Reframe a slump as an opportunity to pivot and position yourself to take advantage of coming changes. With solid strategy and thoughtful relationship management, a bad quarter can be the jumping off point for your best year yet — and a long term relationship that pays off for both parties in the long run. 


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