Credit: C41N/Wikimedia

Tesco's suppliers are still really unhappy

The supermarket's buyers were rated the worst of the 'Big Four'.

by Jack Torrance
Last Updated: 12 Oct 2015

It seems Tesco boss Dave Lewis's promise to 'reset' the supermarket's relationships with suppliers is yet to make its mark. The struggling grocer has faced heightened scrutiny of its buying practices after admitting last September to manipulating its commercial income to put a shine on its financials.

Yesterday the Groceries Code Adjudicator, which is tasked with enforcing rules against late payment, supplier bullying and other abusive methods, published results of a YouGov survey that suggest Tesco has got a long way to go. The poll of direct suppliers found that 54% of all 'issues raised' with supermarkets by their suppliers last year were with Tesco, and that 11% of the supermarket's suppliers had had a problem with it.

What's more, 31% of suppliers said that Tesco's buyers 'rarely' or 'never' complied with the Groceries Code. It might be easy to sympathise with retailers in this situation, as they face such tough competition and pressure to cut prices. But just 6% of discount supermarket Aldi's suppliers said that its buyers rarely or never complied.

'Suppliers are at the heart of our business and we’ve been working collaboratively with them to change the way in which we work together,' a Tesco spokesperson said. 'Since 2013, we have taken action to strengthen our compliance processes and have since established a dedicated supplier helpline in the UK.' Oh, a helpline, that'll do it.

The bigger picture looks a little better. Around three quarters of suppliers said that the culture of grocery supply chains had become more collaborative, and the overall proportion of whom that said they had a problem with a retailer this year fell from 79% to 70%.

But don't pop the responsibly sourced champagne corks just yet. One fifth of those surveyed said they would not raise an issue with the GCA, largely because of fear of retribution, worry that the body would not maintain their confidentiality and a perception it would not be able to do anything about it.

'We still have some way to go in important areas but this [survey] is a clear sign we are on the right track,' said Christine Tacon, the adjudicator. 'Suppliers are more aware of the GCA and its work and fewer now believe the GCA will not be able to do anything if they bring an issue to me.'

Tacon is yet to bare her teeth, but is currently investigating Tesco's behaviour. We'll have to wait and see whether she can make any meaningful difference.

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