Thursday 22 January 2015

Tesco's New Supplier Network - some opportunities to miss?

Tesco’s interactive online supplier-collaboration platform is a step that could easily be converted into a leap forward.

How about Tesco becoming the first really transparent retailer, revealing aspects of the UK business that are usually kept hidden ‘because of commercial sensitivities’…?

Think what productive use suppliers could make of the following:
  • UK Credit periods: average days, and proportional split of payments in advance, on delivery, and 20, 30, 45 and 45+ days… (+ rationale)
  • Brand/Private-label split, overall and by category
  • Sales/sq. ft. by category
  • Gross & Net Margin split, by category
  • Trade investment/Commercial Income: Tesco definitions of each bucket, their purpose, KPIs and method of accounting
  • Split of back & front margin

Tesco have begun a refurbishment of their supplier-relationships, in what will continue to be a challenging and distracting environment (SFO fall-out, increasing consumer sensitivity to David-Goliath corporate relationships…). 

Instead, why not go for a fundamental fact-based renewal of those relationships, via a unique context of openness that will allow and encourage suppliers to design and deliver proposals that will directly address the fundamentals of the supplier-retailer partnership?

Naïve? Of course it is naïve, as with any leap in the dark…
...a darkness where suppliers currently operate, building in +/- buffers to cope with best guesses on key retailer drivers and measures, instead of being able to fine-tune proposals that are tailored to help trade partners to optimise ROCE, in the interest of meeting consumer-shopper need, a primary driver for both parties…    

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