Tesco drops suppliers in cutback drive
10 November 2008
It has been reported that Tesco in the UK has met with its major suppliers to negotiate a range of new terms from prices cuts to delayed payment, which the retailer has denied. However, reports abound that since declaring itself ‘Britain’s biggest discounter’, Tesco is determined to cut back across its value chain and regain ground already lost to Lidl and Aldi.
Tesco has allegedly had similar meetings with its suppliers in Ireland. A source close to one supplier said that the retailer has asked Irish distributors to match prices on offer in the UK or else face losing Tesco as a customer. .
One major soft drinks supplier has reportedly already been dropped by the retailer. Furthermore, a source claims that Tesco is currently evaluating its procurement and buying operations in Ireland and has already closed the clothing office, which will now be managed from the UK. It is suspected that more buying offices will be closed in the future, and that all buying for the UK and Ireland may be handled from the UK by 2010.