Suppliers are still coming forward to complain of tough tactics from the leading multiples as the OFT prepares to release its review into the supermarkets code of practice.
As The Grocer went to press, the OFT was aiming for a before-Easter deadline for delivering its probe into the much-maligned code, which suppliers claim has failed to protect them.
Sources close to the leading retailers last week claimed Asda, Tesco and Sainsbury had all been given a clean bill of health with only “minor infringements” (The Grocer, March 12, p4). But The Grocer can now reveal further claims of the pressure being exerted on suppliers.
The latest complaints from suppliers include reports of 70-day payments by Somerfield - not covered by the code - partly unpaid invoices by Sainsbury and Asda, and abuses of process on promotions in Tesco. The allegations follow a list of tough tactics uncovered by The Grocer in recent weeks. Reports of digressions of the code have included sudden changes to payment terms and no-notice decisions to delist products. One chilled foods supplier said: “It’s worse than ever. We are now waiting up to 70 days for payments from Somerfield, even though the products we supply them with have a 10-day shelf life.”
He said Tesco and Asda were reasonably prompt payers at around 30 days, while Sainsbury was hitting an average of 52 days. Waitrose’s payments arrived within 15 days of delivery.
Another supplier claimed Tesco was now making a habit of ordering more stock than was necessary during promotional periods and then having enough left over to sell at the full price for “two or three days”.
Another complaint included invoice discrepancies at Asda and Sainsbury following the introduction of ‘drop and drive’ deliveries at their depots. “They no longer sign PODs (proof of delivery paperwork) straight away for our goods and then query our invoices,” said one supplier. “I’m losing around 2% of my business through stock that is going unpaid for.”
Sainsbury said any discrepancies on invoices were being caused by suppliers failing to follow procedure and that it did provide PODs during follow-up visits. Asda said discrepancies did occur but it was working to resolve the issue.
A spokesman for Somerfield said: “We would ask suppliers to contact the buyer they deal with if they have issues.”
A spokesman for Tesco said: “All of the promotions run in store are agreed in advance with the supplier. The decision on how any surplus stock is handled after the promotion has run is agreed beforehand as part of the negotiation.”
>>p8 Hawkins on code
Simon Mowbray