Accuracy assisted the central purchasing departments of competing retailers to assess the potential purchasing synergies that could arise from a merger of their purchasing volumes.

Context

Retailers are generating low operating margins and their capacity to purchase at the best price from their suppliers stands among their major competitiveness drivers. Accuracy was called in to determine what synergies could be developed from the potential merger of the purchasing departments of two competing retailers.

How we helped

To respect both competition and commercial laws, retailers are not entitled to exchange their purchasing conditions directly. Moreover, rebate structures are highly complex and assessing purchasing synergies requires in-depth expertise and modelling skills. To tackle these sensitive issues, Accuracy organised fully confidential black-box modelling projects.

Outcome

Our black-box projects paved the way for collaboration or mergers between several major purchasing departments of competing retailers.

Our assessment of synergies was considered highly representative of the real economic synergies to be generated.