What scenario could potentially diminish retailer bargaining power?

The scenario that could potentially diminish retailer bargaining power is the increase in the number of retail competitors. When there are more retailers in the market, they tend to compete for customers, which can lead to lower prices and improved service offerings. This competition may force retailers to focus more on customer attraction and retention rather than on negotiating favorable terms with suppliers.

As competition intensifies, retailers might find themselves unable to demand high margins or exclusive product deals because they need to be customer-centric to outshine other retailers. In a saturated market, manufacturers or brands may also gain leverage, knowing that retailers must offer attractive deals to draw in shoppers. Therefore, a rise in retail competitors can create an environment where retailers have less power over their suppliers, as they must rely more on the appeal of their offerings and competitive pricing to maintain market share.