One thing is certain: if you manufacture a product sold on supermarket shelves today, at some point in the future you will be delisted. Yet there’s a lack of understanding as to the process supermarkets are required to follow.
The latest GCA survey has found more suppliers than ever (39%) say they’ve been trained on the Groceries Supply Code of Practice, up from 29% in 2015. This must be a good thing, right? Yet that leaves more than six out of 10 who are still operating in the dark, placing their organisations at financial risk.
Most suppliers have no idea what constitutes ‘reasonable notice’. Most assume 12 weeks is OK. And while three months’ notice is better than a few days or weeks, it’s still no time at all in the scheme of things.
Imagine you’re an own label manufacturer, and most of your business is with one retailer. As a result, you’re probably sat on a year’s supply of packaging and six months’ worth of ingredients. What then? ‘Reasonable notice’ as defined by the GCA is ‘providing the supplier with sufficient time to have the decision to delist reviewed’ by a senior buyer and allow the supplier the opportunity to meet the retailer’s code compliance officer to discuss it.
Most suppliers we speak to don’t appreciate GSCOP not only covers when a product or supplier is completely removed from a retailer, but also when a retailer significantly cuts the volume of purchases made. The supplier is often given even less notice than if it’d been delisted completely. If a retailer restricts a product that was previously in 1,000 stores to just 200 stores, the supplier also has the right to have the decision reviewed by a senior buyer.
As a rule of thumb, you should always be given the opportunity to sell your stock through, either by extending the time before the product is removed or by agreeing a promotion to clear it. You should also be given the opportunity to put forward your own proposals for how the product could be kept in the range.
If any of the above is news to you, then imagine what else you’re in the dark about. Training on the Code needs to become as important to suppliers as it has become to retailers.
Ged Futter is founding director of GSCOP.co.uk
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