So Waitrose is demanding a 5% cut from suppliers and The Co-operative Group is looking for ‘one-off’ payments of up to 2% (8 October). These two hit the headlines for their requests as they’re viewed by suppliers as being more compliant and reasonable than their big four rivals.
Well, times have changed and they’ve joined the feeding frenzy to get suppliers to open their wallets. The old maxim is ‘if you don’t ask, you don’t get’ and I’m sure the blue chip suppliers will hold firm and counter with their own demands.
Second-tier suppliers, however, must bear in mind this is only the beginning and the retailers have the perfect storm of adding retail space in a declining market. Attracting shoppers is the retailers’ forte, getting suppliers to pay for it is their sleight-of-hand, sorry, in their mutual interest.
I’d like to be a fly on the wall for the negotiations involving the two extremes of supplier strength: the world’s largest brewer, AB InBev, which is looking for a 7.8% increase in January, and the moribund Premier Foods, where 22 of their shares equates to a visit to Poundland.
Glenn Payne, Beer2Love (former multiple buyer at Sainsbury’s and Safeway)