Tesco should recompense suppliers: readers’ poll
Sixty percent of people said Tesco boss Dave Lewis should consider paying compensation following his apology to suppliers last week, found a survey by a FoodManufacture.co.uk.
These industry professionals argued that unsustainable profit-driven practices under the previous management regime caused “real damage” to Tesco’s suppliers.
Only 3% of readers said Lewis’s apology was enough after he admitted that an internal Tesco review revealed 69 potential breaches of the Groceries Supply Code of Practice.
‘Better and different’
But a much greater number (36%) reserved judgement in light of Lewis’s pledge that relationships would be “better and different” going forward.
Tesco response to survey
“We are disappointed by these findings. Our own data has found that the satisfaction rate for our suppliers has increased to almost 60%.”
- Spokeswoman at Tesco
This group of readers took the view that his apology might prove to be enough, but only if Tesco treated its suppliers better from now on.
In response to the survey, a Tesco spokeswoman said: “We are disappointed by these findings. Our own data has found that the satisfaction rate for our suppliers has increased to almost 60%.”
The spokeswoman highlighted Tesco’s introduction of shorter payment terms for small and medium-sized suppliers as part of a new standardised payment policy unveiled last week.
“We continue to work openly and collaboratively in partnership with our suppliers, to deliver fantastic quality products for customers,” she said.
Groceries Code Adjudicator Christine Tacon is investigating claims that Tesco treated its suppliers unfairly, but no financial penalties can be imposed if evidence of wrongdoing is revealed.
Lewis described potential challenges to the Code as the “unintended consequences of making poor choices against the wrong metric” during a speech at IGD conference last week.
Tesco's busy week
- Apologises to suppliers for past mistakes
- Pledges to simplify supplier payment terms
- Posts 55% slump in first-half profit
- Announces price match guarantee
‘Only thing we can say’
He added: “On behalf of myself and the team, the only thing we can say for the choices we made is sorry.”
But his apology to suppliers has been slammed as “too little, too late” by a number of Food Manufacture Group readers and industry insiders.
“Everyone makes a mistake and sometimes sorry is enough. But in the case of this massive conglomerate Tesco’s sorry is too late,” Gary Addison told FoodManufacture.co.uk.
Fosters Bakery md John Foster added: “What if Tesco started, in future, to put the save energy and commitment into building a company that people loved as they seem, in the past, to have put in creating one that people hate? THAT would be a formidable company.”
Tesco has a reputation for wanting ‘Waitrose standard’ products at Aldi prices, Wagstaff Recruitment founder Ruth Forster told Food Manufacture Group’s LinkedIn forum.
“They've been tough negotiators for years and many suppliers have either had to lose their business or kowtow to their stipulations,” Forster posted on the Food Manufacturing Network.
Meanwhile over the past week, Tesco has pledged to match its rival's brand prices at the tills and posted a 55% slump in first-half profit.
See the full results of the poll below:
