I was surprised to read of the terrible hardships that major supermarkets are now suffering, as implied by Kevin Hawkins, head of the British Retail Consortium ('Multiples not to blame', The Grocer, 9 September, p6).
If they are so strapped for cash, this could explain why a recent survey indicated that some paid suppliers later in 2006 than last year. To our knowledge one top multiple only managed to pay 67% of its invoices (below the value of £5,000) within terms.
However, in reality we can put away the violins. The market shares controlled by major supermarkets - in many local areas, well over 50% - and their profit margins paint a different picture.
And their unprecedented power over not only the marketplace but also local authorities is exemplified by their disregard for planning laws.
Confronted with a power even government can't stand up to, it is hardly surprising that many suppliers feel they have to pay annual goodwill fees to prevent delistings. Nor is it a surprise that they feel they must accept set margins in advance of negotiations, bear the cost of bogof promotions, and so on.
Does the BRC believe supermarkets are the only ones subject to cost rises, such as increases in minimum wages, energy, and transportation? These changes have affected us all. For primary producers this has been accompanied by downward pressure on prices rather than financial recompense. On many farms this means that people are working hours that would contravene the EU Working Time Directive for well below the minimum wage.
Major supermarkets are not the bogeymen some might think they are. But it is difficult to believe, given current practices, that they will not keep driving prices down to increase dividends, regardless of the effects on families and communities.
What these retailers don't grasp is that with such power comes responsibility to suppliers and consumers.
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