Suppliers Must Learn To Look After Themselves

At Sentinel we advise suppliers in their dealings with supermarkets. With our team of ex-buyers and suppliers we specialise in overcoming the supermarkets’ much-publicised tactics and pressure to help even the tables. Since the introduction of GSCOP in April, we have monitored these behaviours to see what difference the code of practice has made.

Unfortunately, the answer is: not much. GSCOP is a snare and a delusion. It still boils down to knowing the art of how to deal with the supermarkets.

We see many instances where GSCOP has actually added some weight to the supermarket tactics. By smarter administration and blanket terms agreements, buyers have found it can give legitimacy to some of their pressure games.

The ‘last word’ on paper is given huge importance, so smart buyers are now ruthless at getting that last email away.

Also, given the fact that retrospective demands are now a no-no, we have seen the emergence of a set of new business planning templates. Unless these are treated with caution, it’s a real case of signing your rights away. Same old pressure, just phased forward now into up-front agreements. Sadly, not many suppliers have the stomach or skills to avoid these agreements.

Further, and perhaps even more outrageous, is the supermarket threats written in the name of GSCOP making them look doubly intimidating. This is spectacular brinkmanship that would in no way stand the test of any scrutiny if escalated through the set process.

Seemingly, however, suppliers are reluctant to ‘tell the teacher about the bully in case they get beaten up after school’ on peripheral or strategic issues. Retail buying is filled with 50/50 judgements and it would be easy to sideline a supplier without contravening any guidelines.

Will our Adjudicator, the new Dean of Discipline, make a difference? On the face of it, the government appears to have now indicated a reluctance to get behind GSCOP and the supplier.

Between the delays and diluted powers, the announcement last week is a triumph for the supermarkets’ lobbying powers. Okay let’s wait (and wait) to see what the Adjudicator will do in 2012. Will heads roll or do we have a watchdog with no teeth?

Naming and shaming alone will not help, instead it could be great press for the supermarkets highlighting to struggling consumers just how seriously they take their duty of beating down prices on behalf of their loyal shoppers.

Don’t get me wrong, I’m not criticising the code of practice or indeed its implementation. What I am saying is don’t rely on GSCOP – instead learn your trade. Too many large suppliers are hoping for a change in supermarket behaviour, while too many small suppliers are moaning about pressure and bleating for help.

You can’t blame the supermarkets for asking for money when you repeatedly give them it. It’s their job to build shareholder value and if they can do that by huffing and puffing a bit then huff and puff they will. It’s not the job of a buyer to make friends. So get smart – differentiate through insight and innovation. Get tough–learn the art of negotiation. And get respect–the only real foundation for joint working.

Sentinel Management Consultants deliver sales, negotiation, planning and finance training courses for our clients worldwide.