Iceland has called in an operational improvement consultancy to act as a “gatekeeper” to suppliers making cost price increase requests, The Grocer has learned.
The supermarket has introduced a new layer of complexity by requiring suppliers to take requests to Newton Europe for “validation”, according to Ged Futter, director of The Retail Mind, which provides guidance and training on The Groceries Supply Code of Practice.
Futter said Iceland was requiring ready meal suppliers to jump through the new hoop but there were concerns the expectation could spread to other categories.
“Newton is almost acting like a gatekeeper,” said Futter. “Suppliers have to go through Newton and Newton will validate.
“Using an external party in this way is quite unusual.
“It’s just a new complexity. They’ve started in ready meals, the category Iceland overtrades in most, but it could spread.”
Newton offers its services to a range of sectors including retail, where it promises to help businesses stay ahead and maintain profitability amid the challenges of recent years, from Covid to the cost of living crisis. The company’s chairman is former Asda CEO Andy Clarke.
The expectation that CPI requests should be taken to Newton is causing confusion for suppliers, who do not understand the validation process, according to Futter.
“Suppliers are confused because Iceland are the ones they go to and now they’re being told to go to Newton, and no one understands how Newton will validate it,” he said.
A spokeswoman for Newton said it could not share who it was or was not working with due to client confidentiality.
Iceland did not provide a comment.
Accounts filed at Companies House last month revealed Iceland Foods fell to a pre-tax loss of £4.1m in the year to 25 March compared with a profit of £73.1m in the previous 12 months. Sales fell back 4.3% to £3.55bn as it lapped surging trading in the pandemic.
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