Tesco is conducting a major shake-up of its supply chain across central Europe.
The retailer revealed to The Grocer this week that it was hoping to establish an international distribution hub in the region most likely in Slovakia and that it wanted global suppliers to deliver directly to that depot rather than the five they currently supplied.
"We're speaking with the likes of P&G and Unilever," said Trevor Masters, Tesco CEO for central Europe. "We're saying 'You can deliver to one centre rather than five'." Talks were "quite far down the road," he added.
At the moment, suppliers delivered to depots in Poland, the Czech Republic, Hungary and Turkey as well as Slovakia, and the change would generate huge distribution efficiencies for everyone involved, claimed Masters.
"I'm keen to ensure that suppliers see the opportunity to win on distribution and understand the potential benefits for them as well as for Tesco," he said.
The retailer had not yet finalised its plans for its facilities in the other four countries, he said, but the move would free these up to focus on local distribution. The priority was to give consumers the best possible prices and it was prepared to switch to alternative sources if suppliers refused to sign up to the more centralised system.
There is evidence Tesco is already playing hardball. A Tesco Extra in Bratislava is selling Lynx supplied from the UK alongside European equivalent Axe at a substantially lower price. "We've brought in 1,800 lines from the UK and said we're selling them," said Masters.
Clarke unveils ‘new vision’ for Tesco as Broadbent is named next chairman (11 May 201)
Clarke concedes ‘We must do better’ as Tesco falters in fourth quarter (19 April 2011)
Tesco appoints Simister as global sourcing head (20 March 2010)