“Great – can we pay with a sorry at the checkout Mr Lewis?” one reader, John Strak, told FoodManufacture.co.uk.
“And how is any of this going to help all those honest, hard-working suppliers who were brought to their knees by your purchasing managers and credit terms?”
Another reader Lawrence Lynn described the apology as “too little, too late” and said the retailer must radically change its attitude towards suppliers.
View from analyst
"When he [Lewis] says that Tesco made ‘bad choices’, what he really means is that they screwed their suppliers."
- Julian Wild, head of the food team at Rollits solicitors
“Needs a root and branch clear out of the ignorant and arrogant attitude of the last 25 years, and for the retailer to understand they will have nothing to sell if they continue to alienate the manufacturers and suppliers,” Lynn said.
One food supplier said he has not approached Tesco in 34 years of running his business because of the way he has witnessed others being mistreated.
“Wisdom has arrived finally but it could be too late,” he told FoodManufacture.co.uk.
Lewis apologised to suppliers, customers and other stakeholders during a speech at the IGD’s conference this week.
An internal review of the retailer’s dealings revealed 69 potential challenges to the Groceries Supply Code of Practice, he admitted.
“These 69 cases were the unintended consequences of making poor choices against the wrong metric,” Lewis said.
Analyst Julian Wild, head of the food team at Rollits solicitors, welcomed the apology but not the way in which it was made.
Instead of speaking plainly, Lewis used “management gobbledygook” and “business school-speak”, Wild said.
“It was a positive move to come out and say sorry for the way Tesco treated suppliers under the previous regime,” the analyst said.
“When he says that Tesco made ‘bad choices’, what he really means is that they screwed their suppliers. Everyone knows it, so why doesn’t he come out and say so?”
Wild said the potential challenges to the Code represented 69 complaints of Tesco behaving unacceptably towards its suppliers.
“These were not ‘poor choices’. They were evidence of a big retailer determined to maximise profit at the expense of their suppliers in unethical ways,” Wild said.
Meanwhile, Tesco is subject to three separate investigations into its conduct and accounts.
Three Tesco investigations
- The Groceries Code Adjudicator Christine Tacon is investigating claims that Tesco treated its suppliers unfairly.
- The Serious Fraud Office is probing accounting irregularities, which led the supermarket to overstate its first-half profits by £263M in summer 2014.
- The Financial Reporting Council, the independent watchdog for UK accountants, is also scrutinising the retailer’s accounts.
Has Tesco done enough to make amends for its mistakes? Take part in the survey below to test your views against those of other industry professionals.
Is Tesco boss Dave Lewis’s apology to suppliers enough or should he do more?
Yes: it is enough. After Lewis ‘fessed up, now is the time to move on.3%
No: Tesco’s self-confessed mistakes did real damage to its suppliers. Lewis should consider paying compensation.60%
Maybe it’s enough: much depends on how Tesco treats its suppliers from now on.36%