Stores Magazine - December 2007 - (Page 46)

NUTS AND BOLTS / SUPPLY CHAIN Meanwhile, retailers “are waking up and saying this is not what they bargained for,” says John Rand, director of retail insights for Cambridge, Mass.Recent recalls require re-evaluation of quality control based Management Ventures. “People measures, experts say recognize that it is a problem in the way the industry outsources and a risk no BY LEN LEWIS one can afford to continue taking.” Recent surveys by Zogby Internationt’s called the “China price” — the cost against which everyone else in al indicate that consumers have mixed manufacturing is measured, and the primary reason that China has feelings. Overall, 82 percent of those become an economic giant and the world’s factory for everything from surveyed are concerned about buying toys to textiles. goods from China due to recent recalls of toxic toothpaste, contaminated pet Recent recalls and global angst over a wide array of contaminated products has food and seafood and lead paint-laced shined the cold light of day on China’s production practices, however. And while the toys. Still, 69 percent believe non-food long-term impact on U.S. retailers and manufacturers has yet to be measured, the sititems from China are safe. uation has created a crisis of confidence in U.S. regulaLess than half (46 percent) FOUR PILLARS ACTION PLAN tory agencies and placed global procurement under infeel the Chinese government tense scrutiny. is taking the recalls seriously; A mandatory foreign supplier qualRetail industry observers are quick to point out that 63 percent said they would ity assurance program participate in a boycott of nothing is going to stem the flow of Chinese imports, Chinese goods until the which increased nearly sixfold over the past decade to A voluntary qualified importer country implements stricter $288 billion in 2006, according to foreign trade statisfood safety program safety regulations, and 61 tics from the U.S. Census Bureau. percent would be more likely “The Chinese understand how critical the issue is to Bolstering the capabilities of forto purchase a product with a American consumers and they are working hard to coreign governments to ensure food “China-free” label. rect the problem,” says Rajiv Lal, the Stanley Roth sensafety practices The majority of responior professor of retailing at Harvard Business School. Building up the capacity of the “But ultimately, it’s the manufacturer’s responsibility to dents (86 percent) were FDA to make it the “gold standeliver quality goods. As such, branded manufacturers aware that price is the pridard” for food safety regulations will have to recalibrate their quality control systems.” mary motivator for purchas- China Syndrome I 1 2 3 4 46 STORES / DECEMBER 2007 WWW.STORES.ORG http://WWW.STORES.ORG

Table of Contents Feed for the Digital Edition of Stores Magazine - December 2007

STORES - December 2007 Contents Executive Editor's Page President's Page Holiday Shopping Extravagance What Shoppers Think 10 Things You May Have Missed Numbers Worth Counting Full Price/Markdown Retail People Niche Marketing Eight Predictions for 2008 Concept2Watch Merchandising Strategy Sourcing E-Commerce Supply Chain Warehouse Management Software Contactless Payments Marketing Marketing Online Loeb Retail Letter ARTS Update Point of View NRF News Retail Industry Calendar Last Laugh

Stores Magazine - December 2007

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.