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Tesco will increase the supplier's fees for online sales.

 

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The FTSE 100 grocer told suppliers last week they would have to shoulder new Amazon-style' fulfilment fees' per item sold on Tesco. The proposed fees are understood to be 12p per item for branded goods and 5p for own brand, but Tesco has since said the numbers are up for negotiation with each supplier. The smallest suppliers - those with £250,000 or fewer contracts - are set to be exempt. Still, businesses such as fruit and vegetable growers, which sell via more enormous intermediaries, fear the costs will trickle down to them. Lee Stiles of the Lea Valley Growers Association, representing tomato and cucumber growers in the Essex-Hertfordshire border, said the larger distributors would inevitably pass costs down the line.

Ged Futter, a former Asda buyer who advises suppliers via his consultancy The Retail Mind, said the move was a multi-million-pound "money grab" from Tesco. "They've got gaps on their shelves because they won't pay suppliers to put up the needed costs," he said. "Now, on top of that, they're expecting the same suppliers to pay Tesco for the privilege of using online. In response, Tesco highlighted new support it has given to British farmers this year, including higher payments to chilled vegetable growers.

The new terms by Tesco could apply as early as Monday, but the supermarket said there was no deadline to sign up. The fees will apply per item to all goods sold on Tesco's UK or Irish website and all orders made through Booker, Tesco's wholesale arm for retail and catering customers.

www.sba.tax

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Comments

  1. Liam12 March 2023 at 09:52

    Probably not the best timing for this. Tesco is making a mistake. Instead of doing this now it would be better to just let suppliers know that this may be coming 1 year from now. That they will try to prolong this "grace" period as long as they can because they value their suppliers. Wouldn't that sound much better?

    ReplyDelete
    Replies
    1. Chris12 March 2023 at 10:17

      It would. Most suppliers get it. They know sometimes prices and costs go up. But they hate being forced into this. And so quickly. Give them time. Show them you care about them as well as about yourself, Tesco.

      Delete
    2. Marshall12 March 2023 at 10:28

      Tesco is now actively alienating suppliers and some will find new solutions. Not today, but in a month, 3, 6 they will be gone.

      Delete
  2. Jeremy12 March 2023 at 11:35

    Tesco forgets that suppliers are very important for their business and they should be treated with care and respect. Once you stop doing this, you will lose revenue. This measure will have the exact opposite effect: it will eventually lead to lost revenue.

    ReplyDelete

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