Tesco is coming under increased fire from suppliers for attempting to make them carry the cost of shelf-ready packaging.
The retailer is currently rolling wheeled merchandising units to its bread and beer fixtures (The Grocer, February 26, p12). It has also introduced shelf-ready packaging to soft drinks and cakes and is shortly expected to roll it out to confectionery, cereal and biscuits.
However, a senior source at one of the suppliers that will be affected, said: “It’s a double whammy for Tesco. It strips out labour costs for itself but suppliers pay the cost. The only loser is the supplier. We’ve said that if there are any costs to shelf-ready packaging, we’re going to pass it on in cost increases. We’ll do it as long as it is cost-neutral for us.”
However, if it wasn’t cost-effective, it could be forced to withdraw lines, he said. “Tesco has said it will delist products if they don’t do SRP. But if we can’t recoup our costs we may have to take some SKUs out. If you’re only generating £50,000 a year, say, on a SKU and shelf-ready packaging costs £60,000, we won’t have a choice.”
