It’s no easy feat selling your product to the big players. Persuading the supermarkets to give you shelf space is one hell of an accomplishment. But what happens when that relationship you’ve worked so hard to build-up turns sour?
The relationship between supermarkets and their suppliers is never long out of the news these days. The gist of the ongoing argument is the thousands of smaller businesses keeping the retail giants stocked up with products are getting a bum deal.
Many suppliers are unable to lock down a proper contract, hence no notice periods for cancellation of orders, and no official agreement on prices. If 90% of your turnover comes from supplying just one supermarket chain, the effects of them cancelling, or dramatically reducing, an order at short notice could be enough to get you calling in the administrators.
Many of these businesses dare not complain for fear of getting a bad reputation or even losing the supermarkets’ custom altogether.
Back in 2002 the Office of Fair Trading put in place measures to re-address the balance between the suppliers and the supermarkets. But shock horror, it seems a VOLUNTARY code of practice hasn’t made much difference.
A recent poll by Grant Thornton found that 76% of suppliers think the code isn’t worth the paper it’s written on because it offers no real protection for them.
A message to the OFT: Now that we’ve tried a voluntary code, perhaps it’s about time for some proper rulings. Something enforceable would be nice. Just a thought.
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