Suppliers have reacted angrily to new demands from The Co-operative Group for lump sum payments.
Several suppliers operating across ambient and chilled told The Grocer they had recently been asked for payments. Without citing figures, the companies indicated that the requests were significant.
“The amount they were asking for was totally out of the question. It was ridiculous,” said one supplier.
Another said: “They’re obviously trying to fill a hole in their profits before the year-end.”
The suppliers also expressed concern about The Co-op’s current trading. It was the only food retailer with declining sales in the latest Kantar Worldpanel data, down 1.2% for the 12 weeks to 13 October.
The Grocer understands the requests may be linked to the retailer’s plans to reduce the number of suppliers it works with and to get those that remain to invest in its business plans.
The Co-op confirmed it was in negotiation with a number of suppliers.
“We are working more collaboratively with our key suppliers and drawing up joint business plans for the year ahead,” said a spokesman. “This was outlined at our annual IGD suppliers’ conference in early September, when we shared our strategy for growing the business with all our suppliers.”
In August, Steve Murrells, head of food, said he was looking to take £300m of costs out of the business over the next three years. This would fund the rollout of fresh format stores and investment in price and own-label.
The Co-op would pull out of areas where there was no added value. The goal was to get into “a virtuous circle of growth where suppliers will want to work with us because they can see we’re putting through more production in their facilities,” he said.
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