A Research On The Slotting Allowance Of Supermarket

Slotting allowance comes from the U.S.A.30 years ago, when the American industry began to depend on computers, big supermarkets also began to collect slotting allowance from their suppliers, and the slotting allowance was brought into China by Carrelour in 1995. Nowadays it has become the"guild regulations"in the field of supermarket in China.In both academic and business fields, there is still no agreement on the reasonable of the slotting allowance. Some insist that the slotting allowance can improve the efficiency in the retail channel,and promote competition, it is reasonable to collect slotting allowance from the economic view. While others insist that it is the abuse of power by big supermarkets (or retailers) just in order to get more profit from collecting slotting allowance.In China, both of the central and local governments (for example, Beijing and Shanghai) have issued relative rules in order to regulate the slotting allowance practiced in China. In this background, according to the situation between supermarkets and suppliers, combined with the practices in China and mathematical model, this paper mainly illuminates the effects of the slotting allowance made on the supermarkets and suppliers, and the effects of slotting allowance on the price and profits.From the appearance of the slotting allowance, it has always been the focus of conflicts between supermarkets and suppliers. Though there is no one voice towards it, Slotting allowance has been proved the necessity of being exist. Based on the former studies of both domestic and abroad, this paper takes advantages of the knowledge of mathematics to model the slotting allowance, in order to study the reasonable of it, and the effect on the distribution of profit between supermarkets and suppliers.In practice, collecting slotting allowance has become the regulation and will not disappear in the market. And, from this study, we conclude that the slotting allowance is reasonable and useful to some extent. However, there is something unreasonable such as some specific charges that need to be prohibited. I hope the results of this research can provide some suggestions to supermarkets, suppliers and even relative governmental departments when they deal with the slotting allowance problem. I also hope that this research can make some contributions to the academic research.