Malcolm Walker Retail Week Columns

Finding a better way of dealing with suppliers

Iceland is meeting suppliers to create a more transparent, collaborative way of doing business.


Regular readers will know that I’m as keen on bureaucracy as Jeremy Corbyn is on the monarchy. Small wonder, then, that I wrote a column here six years ago dismissing the proposed grocery ombudsman as a waste of time and public money.

I certainly wasn’t anticipating then that Iceland would be playing the star villain in the 2015 Groceries Supply Code of Practice (GSCOP) survey, as the supermarket least compliant with the code. Naturally I wanted to find out why.

When I actually read the GSCOP rules I was surprised to find nothing I could really disagree with. It’s the way any right-minded person would want to conduct their business.

I’ll admit that there is a remarkable contrast with our own complex terms and conditions. But then the same is true of the terms and conditions imposed on us by our larger suppliers.

Or I should say the conditions that we each try to impose, because in reality they are so unreasonable that no one in their right mind ever signs them.

This is a crazy way to do business so next week I’m hosting a supplier conference with a difference. Not to ask for keener prices, but to promise a simpler and more transparent way of doing things that I hope will make all of us happier and richer.

I like a challenge. No one could believe it when Iceland was twice voted the UK’s best big company to work for. Now I’m aiming to make us the best food retailer to do business with.

But we’re only a small player, with just 2% of the grocery market. And that means big branded manufacturers can and do try to push us around in exactly the same way that some retailers allegedly bully their smaller suppliers.

My particular bugbear is their obsession with promotions: half price, 50% extra free, BOGOFs and so on.

That and the ridiculous proliferation of retrospective discounts and overriders that mean you need a first-class maths degree to work out your cost price. A real issue when your only qualification is an O-level in woodwork.

Our customers can’t understand why we can’t sell their favourite brands at an everyday low price all year round, and frankly neither can I.

Particularly when our discount competitors do seem able to secure such deals, perhaps because they have the leverage of being able to turn to cut-price lookalikes as an alternative.

Should we perhaps seek to extend the role of the ombudsman to protect smaller retailers from big suppliers? No.

Better that we should all try to understand each other’s needs and aim for cooperation, not confrontation.

If Iceland is going to trade successfully we need constant innovation that helps to give us a point of difference, and prices that are permanently realistic when measured against our competitors.

We’re going to offer a better way of doing business and I hope our suppliers respond positively. If they do, I hope to see a marked improvement in our ranking in the next GSCOP survey.

And if we all try to help each other, we won’t need an ombudsman after all, will we?

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