Chargebacks and Deductions in the Retail Supply Chain

Challenges to the retail supply chain have followed closely throughout the year as consumer spending is a key barometer of the broader economy.  The combination of skyrocketing commodity costs and continued bargain hunting by consumers are exerting unusual price and margin pressures on retailers. Currently, everyone is eagerly anticipating the results of August sales as chains hope that back-to-school season and tax-free shopping weekends will boost same-store-sales results.  But one topic that you won’t read much about is the on-going battle over chargebacks and deductions between retailers and their merchandise suppliers.  Billions of dollars of waste and inefficiency exist in the retail supply chain, which impact the bottom lines of both parties.  Why the secrecy?

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Attacking the Phantom Energy Menace

A recent study by the McKinsey Global Institute found that 10% of all energy worldwide is consumed by commercial real estate sites.   Commercial buildings, as defined in the study, include a broad array of non-manufacturing structures such as hotels, hospitals, restaurants, warehouses, retail stores and office buildings.  Stated another way – one out of every ten BTUs of energy produced is used to heat, cool, power or light buildings.  This statistic may surprise you, but commercial energy usage is relatively small when compared to residential household consumption.  Residences utilize 2.5 times more energy annually than businesses.  Commercial energy usage is small relative to the transportation sector.  The ground and air transportation sectors consume almost 2 times as much.  Nonetheless, commercial buildings represent a significant energy user and therefore a worthwhile candidate for exploring efficiency initiatives to support the environment.

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