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The Arizona Republicrecently reported that local Arizona restaurants, eager to control food and other supply costs, are increasingly turning to the group buying model to help increase their chance of survival amid tough economic conditions.
“National group purchasing organizations such as Dining Alliance, FoodBuy and Integra exist to extend the high-volume purchasing power enjoyed by large restaurant chains to midsize and small restaurants. When restaurants contract with these organizations, they essentially pool their resources, which grants the organizations more leverage when negotiating with distributors on their behalf,” said Republic reporter Jeff Marshall in the piece.
Local First Arizona, a non-profit organization representing a coalition of locally-owned businesses, is in the early stages of creating its own restaurant GPO, the Republic reports.
“We hope to have our group purchasing organization up and running sometime in the fall,” said Kimber Lanning, director of Local First Arizona. “Many restaurants have asked us for items such as eco-friendly to-go boxes, so that is just one of the items we are looking into providing.”
“Merging with Dining Alliance has given us the opportunity to have buying power, so we could keep our prices down and our margins intact,” said Sharisse Johnson, co-owner and co-CEO of Macayo Restaurants LLC. “What’s happened in this economic recession is that consumers are very price sensitive, and sales have been down the past few years in the casual-dining restaurants, but Dining Alliance has helped us stay competitive.”
Restaurants and food service are just one of many industries increasingly turning to group purchasing organizations to help control costs. Last year, New York City Mayor Michael Bloomberg announced that the city had partnered with a group purchasing organization to help nonprofits operating in New York maximize savings on purchases and give New York City funded nonprofits access to discounts on a wide range of goods and services.
“With more than 40,000 nonprofits calling New York City their home, a strong nonprofit sector is vital to job creation and it is equally vital that New York City support these businesses,” said Mayor Bloomberg. “In 2009 we took several steps to help the nonprofit sector survive and strengthen and today, with group purchasing discounts, we deliver further on that commitment.”