Grocer’s Guide to Professional Services & Cost-Plus Models

Small and regional grocers face the same challenge: how do you stay competitive against bigger chains and still serve your local market’s unique preferences? National distributors like UNFI and KeHE offer “professional services” that promise to help with category resets, store layout, inventory management, and more. It’s appealing—especially if your staff or budget is limited.

But you’re also signing on to a cost-plus contract that aims to simplify pricing for retailers yet often creates confusion for both parties. This guide unpacks what “professional services” actually include, how cost-plus works in practice, and how to ensure you really benefit from outsourcing.

What Are “Professional Services”?

When UNFI or KeHE talk about “professional services” (sometimes called “retail services” or “digital services”), they’re referring to a broad suite of support that goes beyond simple product distribution. You might see offerings like:

  • Category Reset & Planogram Design

  • In-Store Merchandising Assistance

  • Inventory Management & Ordering Solutions

  • Retailer Education or Training Sessions

  • Data & Analytics Dashboards

  • Pricing Optimization Consulting

  • Store Remodel & Layout Guidance

  • Marketing & Promotional Planning

  • New Store Opening Support

  • Private Label Development (in some cases)

They present these services as a way to reduce your workload and modernize your store operations. You’ll see big claims about improved margins, better category performance, or streamlined ordering. But keep in mind: these are add-on services, not a magical fix-all. The distributor is still, at its core, there to distribute product—not to run your store.

Understanding the Cost-Plus Model—It’s About Transparency (Until It Isn’t)

The cost-plus model is designed to give retailers a straightforward, predictable way to buy product. The distributor takes the brand’s cost (COGS) and adds a set markup before delivering it to you. In theory, this keeps pricing transparent for the retailer—you see the final cost, plus a known percentage.

Why It Gets Murky:

  • Inside Income: Because large retailer contracts are highly competitive, a distributor’s “plus” might be too slim. They recoup the rest from fees charged to brands (spoils allowances, data fees, promotions).

  • Disconnect Between Brand & Retailer: You, as the retailer, see your delivered cost. The brand sees what it’s paid (minus fees). Neither side may know the exact total margin the distributor makes.

  • Complex Programs & Extra Services: The more services or programs you sign up for, the more line items or intangible costs may pop up—leading to confusion about where your money’s going.

    Bottom Line:
     It’s not inherently evil; it’s just a system that tries to keep shelf pricing stable for retailers but can create unexpected fees and margin hits if you’re not paying close attention.

Pros & Cons of Outsourcing to a National Distributor

Pros

  1. Efficiency: A single invoice, consolidated deliveries, fewer vendor relationships to manage.

  2. Massive Product Assortment: Not just natural or organic lines—UNFI and KeHE carry mainstream giants like Kellogg’s, Nabisco, General Mills, plus thousands of specialty and ethnic brands.

  3. Professional Guidance: If you need external help with category resets or store remodels, they’re already in your supply chain.

  4. Potential Cost Savings: Compared to running multiple direct supplier accounts or a regional DSD, cost-plus might be simpler—especially if you do high volumes.

Cons

  1. Local Identity Risk: A standardized planogram may remove niche or local favorites.

  2. Less Negotiating Power: The distributor’s fees and “plus” can be rigid once set, and your options for alternative supply might be limited if you rely heavily on certain SKUs.

  3. Unclear ROI on Extra Services: Without detailed tracking, you might be paying for professional services that don’t truly lift your margins or store traffic.

Complicated Fee Structures: If your store is on a low “plus,” the distributor may push brand fees or inside income that indirectly affect your cost or product assortment.

Evaluating the ROI on Professional Services (Go Deeper)

When a distributor pitches you on category resets, new store layout help, or inventory management services, ask more than “How much?” You need to understand how their work will convert into tangible returns.

  • Set Clear KPIs: Is success measured by a percentage increase in category sales, fewer out-of-stocks, or improved basket size? If they can’t articulate these metrics, you may never see real proof of improvement.

  • Get a Detailed Scope: Are they merely sending you updated planograms, or will someone physically come reset your shelves? Will they train your staff?

  • Ownership of Data & Changes: If they provide analytics, do you keep ongoing access? If you end the service, do you lose those insights?

  • Look for Hidden Costs: Some retailers find out mid-project that “professional services” require them to buy certain marketing packages or pay additional fees for “implementation.”

  • Ask for References: Have they done similar resets for another store of your size? What results can they point to?

Tip: If the distributor claims a certain category boost, insist on a pilot test in a limited department or region before rolling it out everywhere. That way, you can measure results without risking your entire store setup.

Common Complaints & How to Mitigate Them

  1. Fee Surprises

    • Mitigation: Request a line-item breakdown. Ensure any new or ongoing fees are spelled out in your contract. Revisit these terms annually.

  2. Over-Standardization

    • Mitigation: Retain final say over certain local or regional SKUs. Provide the distributor with sales data for high-performing local items to keep them on shelves.

  3. Push for Preferred Brands

    • Mitigation: Make sure the final category set aligns with your customer base, not just the distributor’s best margin items.

  4. Insufficient Follow-Through

    • Mitigation: Assign an internal champion to hold the distributor accountable for deliverables. Maintain monthly or quarterly check-ins to address issues early.

  5. Miscommunication

    • Mitigation: Spell out roles. Are they handling promotional signage? Are you? Who trains staff on new shelf arrangements?

Making It Work in a Cost-Plus World

It’s possible to thrive with a national distributor’s support—you just have to stay in the driver’s seat.

  • Keep One Hand on the Wheel
     Even if they run point on planograms or category resets, remain involved. Visit stores, talk to your team, and gather shopper feedback.

  • Monitor Your Margins
     Before signing any contract, calculate how changes in ordering or SKUs will affect your overall margin. If you can’t pencil out a net benefit, negotiate or say no.

  • Pilot First, Then Expand
     A small test run can confirm whether professional services actually boost revenue or reduce labor hours—before you commit chain-wide.

  • Consider a Hybrid Approach
     Maybe you use the distributor for half your store’s departments but keep certain categories direct (like local produce or specialized craft brands) to maintain uniqueness and margin control.

Ultimately, transparency and oversight are your best tools. A cost-plus model isn’t inherently bad—it can simplify your procurement. But when layered with extra services and brand fees, confusion can arise fast. Clarify everything upfront, track metrics diligently, and don’t be afraid to push back if a service isn’t delivering.

Be the Boss of Your Partnership

Professional services from UNFI, KeHE, or any large distributor can streamline operations and modernize your store—but only if you keep control. Remember, they’re still in the business of distribution, not running your retail location. If you approach these services with clear goals, a detailed contract, and firm oversight, you can reap the benefits. Otherwise, cost-plus fees and one-size-fits-all solutions can dilute your local identity and cut into profits.

Next Steps

You’re the store owner. Make sure that any “professional services” truly serve you—and the shoppers who keep your doors open.