Sainsbury’s has revealed that it plans to strip out underperforming suppliers and scale back the number of promotions it runs.

The retailer told suppliers at a trade briefing in London this week that “not everyone in the room can be on our bus”. Mid-tier brands, in particular, would be in the firing line, the retailer said, with one senior director reportedly warning them: “It will cost you money to trade with us.”

Senior directors added that it was only interested in working with suppliers that could grow with the supermarket. These would need to be prepared to invest in the business and partner it more closely. Group commercial director Mike Coupe said that suppliers had to deliver insight to drive sales and growth, not just a good price.

Sainsbury’s wanted to reduce the overall number of branded lines stocked in favour of more own-label and complementary premium brands. It also pledged to scale back its promotions. It revealed that in some categories 90% of sales were for products on promotion, but said some of the blame had to be shouldered by suppliers who “irresponsibly bribe their way on to shelves”.

Sainsbury’s added that it wanted to make its pricing “fair and clear”. It claimed it was trusted on value thanks in large part to Brand Match.

Sainsbury’s CEO Justin King downplayed the threat from the discounters. Sainsbury’s Local stores were worth more in terms of sales than Lidl and Asda and its convenience store sales were growing faster, he said. When it had let space next to one of its stores to a discounter, it had seen sales rise because consumers shopped at both stores, he added.

Some suppliers described the briefing as “collaborative” and honest. However, one said: “Every year they state a reduction in promos, every year the percentage on promotion goes up.”

Topics