The national press rushes in all too quickly to portray supermarkets as exploitative. Perhaps they should report the facts, instead Sooner or later we were bound to have another wave of anti-supermarket propaganda in the media. Sure enough, in the past couple of weeks it's arrived. In saying this, I'm not including Joanna Blythman's essays on "bullying" supermarkets that have all the predictability and intellectual content of a powerful laxative. No, there are more substantive issues to address.
During the floods in the Severn and Avon valleys, it escaped the attention of the media that virtually all the bottled water distributed by Severn Trent Water was supplied by the big supermarkets. It was reported at one stage by the BBC that independent retailers were charging scarcity prices for bottled water, ie "profiteering". If that had been attributed to any supermarket, all hell would have broken loose. But it wasn't and it didn't. Small independents are treated like angels in marble.
The next issue arising was the alleged refusal of the supermarkets to pay higher prices for their produce to growers and packers whose crops had been damaged by the rain. It was, of course, these same suppliers who lobbied for and secured longer-term contracts with agreed prices as a safeguard against short-term price reductions by retailers. In the event, the supermarkets are paying what they need to pay to secure adequate supplies - the market rules. And, finally, we come to the more recent "shock horror" disclosures in a Sunday newspaper regarding allegedly threatening emails to the suppliers to two leading supermarkets. Leaving aside the unethical and probably illegal disclosure of confidential information to the media, the media reporting was remarkably uncritical.
It was claimed that both retrospective payments to retailers and up-front payments for prime positions in stores were contrary to the supermarkets code of practice. But they're not - as long as they're an agreed part of the terms and conditions of a given supply contract. Getting a prime position can make a big difference to sales, so paying something for the privilege is not at all unreasonable. Most suppliers have been dealing with the same retail customers for many years and are doing rather well out of it. So it's not surprising that, contrary to Ms Blythman's claim that suppliers' margins are "non existent".The Grocer's recent annual survey of 150 food processors' profits reveals an average net margin to sales twice as big as that of the big four supermarkets. Who's kidding who?n Kevin Hawkins, director general of the British Retail Consortium
During the floods in the Severn and Avon valleys, it escaped the attention of the media that virtually all the bottled water distributed by Severn Trent Water was supplied by the big supermarkets. It was reported at one stage by the BBC that independent retailers were charging scarcity prices for bottled water, ie "profiteering". If that had been attributed to any supermarket, all hell would have broken loose. But it wasn't and it didn't. Small independents are treated like angels in marble.
The next issue arising was the alleged refusal of the supermarkets to pay higher prices for their produce to growers and packers whose crops had been damaged by the rain. It was, of course, these same suppliers who lobbied for and secured longer-term contracts with agreed prices as a safeguard against short-term price reductions by retailers. In the event, the supermarkets are paying what they need to pay to secure adequate supplies - the market rules. And, finally, we come to the more recent "shock horror" disclosures in a Sunday newspaper regarding allegedly threatening emails to the suppliers to two leading supermarkets. Leaving aside the unethical and probably illegal disclosure of confidential information to the media, the media reporting was remarkably uncritical.
It was claimed that both retrospective payments to retailers and up-front payments for prime positions in stores were contrary to the supermarkets code of practice. But they're not - as long as they're an agreed part of the terms and conditions of a given supply contract. Getting a prime position can make a big difference to sales, so paying something for the privilege is not at all unreasonable. Most suppliers have been dealing with the same retail customers for many years and are doing rather well out of it. So it's not surprising that, contrary to Ms Blythman's claim that suppliers' margins are "non existent".The Grocer's recent annual survey of 150 food processors' profits reveals an average net margin to sales twice as big as that of the big four supermarkets. Who's kidding who?n Kevin Hawkins, director general of the British Retail Consortium
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