Retailers and Their Suppliers
Tough Tactics in the Spotlight
Media coverage about the tactics supermarkets are taking with their suppliers has been widespread. At the same time, there is recognition that all parts of the food and drink supply chain are under tremendous pressure. At issue is whether these understandable stresses are causing retailers to breach ethical or legal guidelines.
FTI Consulting surveyed organisations that supply retailers in the UK to the tune of £12 billion in annual sales. The research found that retailers are increasingly squeezing suppliers in contractual negotiations. Food and drink retailers, including supermarkets, are seen as most likely to impose financial pressure on counterparties, with purveyors of electrical household items being cited second most often.
- 62% of suppliers believe food and drink retailers have a reputation for being demanding
- 1/3 are under significant pressure to lower product costs and offer discounts
- 80% believe large retail stores are protecting profits at the cost of suppliers