Current Status and Problems of Slotting Allowances in China: Based on the Results of a Survey of Food Retailers and Food Suppliers

Abstract

This paper investigates the current status of slotting allowances in the retail industry in China and the countermeasures of suppliers. The results of surveys of “Company R,” a major food retailer, and “Company C,” a food company, show that slotting allowances are often at a flexible rate. These slotting allowances allow retailers to cover their costs and help retailers to find better suppliers. However, the slotting allowances are relatively high for most suppliers such that some even find it difficult to make a profit. Therefore, “Company C” adopts its own pricing strategy and sales strategy to adapt to the retail market in China.