Booker retailers have expressed concerns the new fulfilment fees imposed on suppliers by Tesco could result in higher prices or availability issues.
The supermarket giant wrote to suppliers last week announcing new charges for those selling on its online platform or through its Booker wholesale operations.
While Tesco has promised Groceries Code Adjudicator Mark White that no suppliers will be delisted if they refuse to sign up, Tesco’s initial warning that suppliers could face the threat of range reviews or reduced pricing has raised concern among Booker retailers about the collateral impact it could have.
“It’s not just availability that could be an issue, but it’s even more price rises us retailers could bear,” said Londis retailer Raaj Chandarana.
“It’s essentially a listing fee for suppliers, which they’ve never had before, so in order to make sure they’re making their money back, they could increase their case prices to cover that fee.”
Premier retailer Mike Lakhani added: ”The suppliers will eventually play ball just like what happened with Mars and Whiskas, but will that come at a cost for us retailers with even more price hikes?
“We’re already fighting enough inflation from big suppliers and any more charges will be passed to us as usual, which is then passed down to customers. The cost of living is already bad enough and people are struggling… how much more can we take?”
Fellow Premier retailer Samantha Coldbeck said: “As Booker retailers, we haven’t received any information about the pending fulfilment fees. I’m concerned Booker customers are potentially going to be caught up in the wrangle between Tesco and suppliers whilst this is being resolved.
“Further availability issues are the last thing we need after a very turbulent few years.”
Last year, Booker introduced a £29.95 delivery fee for Premier and Family Shopper retailers, and a £34.95 charge for non-symbol customers, with the decision prompted by rising costs of drivers, vehicles, fuel and equipment.
At the time of the announcement, disgruntled retailers highlighted the various measures they would need to take, such as cutting staff hours, in order to counteract the new delivery fees that would cost them thousands more pounds a year.
Now with the new fulfilment fees to suppliers, retailers are debating what it could mean for their own delivery charges.
“When Booker delivery fees were introduced, retailers had to absorb the increased cost into their bottom line,” added Coldbeck. “We have always received an exceptional service from Booker so this made the charges slightly easier to digest.
“I would hope the fulfilment fees Tesco are proposing would mean cost prices would decrease for independent retailers, who are facing crippling utility bills and staff costs. We cannot simply have the supplier fulfilment costs passed into us. Time will tell.”
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