Retailers struggling in the current economic downturn can make dramatic savings by renegotiating existing contracts, a paper published this week argues.

Published by The Gap Partnership, an international management consultancy that specialises entirely in commercial negotiation, the report is called ‘Negotiating through the credit crunch - creatively’.

The report proposes that the value held within contracts signed six months ago or more has shifted significantly, and if agreed today, would reflect the risks and uncertainty of the current economic climate.

It urges companies to renegotiate existing contracts to reflect current economic circumstances, and so cut costs and deliver much-needed value to the business.

Steve Gates, managing partner of The Gap Partnership, said: “Failing to renegotiate your contracts translates to paying over the odds. The recession has changed what represents value and now is the time to re-visit deals agreed before summer last year”.

Gates also believes that “if you remove price from the equation, and focus on other variables - such as storage, delivery and promotional investment - you can start to create more value and do better deals. By training employees to adopt a more creative negotiation strategy, British businesses will do better deals. The more innovative you can get, the more value you can create.

“Morrisons’ announced a sharp rise in sales - enabled by continually negotiating robust contacts with its suppliers. Its new Price Crunch range has drawn extra customers using quality products at cheaper prices. Key to this has been its strong supplier relationships achieved through creative negotiation,” he said.

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