How Tesco & co can learn from their Suppliers

The British UK retail sector is in the news recently (again!) with stories of Tesco’s relative decline and accounting irregularities. Early indications suggest the accounting mess is a symptom of the complex and murky supplier rebate schemes in operation at many leading UK retailers. This story, along with others which have emerged from the non-food sector, where well-known retailers such as Debenhams, John Lewis and Halfords have demanded rebates from suppliers, shines the spotlight once more on the unbalanced relationship that exists between large UK retailers and their suppliers.

TradeBridge has to some extent been picking up the pieces further down the supply chain with its supplier payment programme, SupplierPlus, firmly aimed at UK food and non-food suppliers who supply major UK retailers, but who struggle with the payment terms demanded from such customers. Our customers have benefitted through using our funds to meet their supplier obligations.

Some choose to actually accelerate payments to their key suppliers, recognising that their growth and survival depends on these key relationships. It is generally the smallest SMEs at the bottom of the chain who find it hardest to access regular banking lines, so having their invoices settled early is of critical importance; and they are more than willing to pick up the financing costs associated with these facilities.

Other customers use our funds as a bridge to enable them to extend their creditor days without hurting their suppliers. Such facilities are vital to enable them to juggle their cash flow to enable them to supply to big retailer in the first place. Though it is really very pleasing to see that the appalling supplier relations practises of some big retail chains are not replicated by everyone, and least of all by our clients.

TradeBridge provides a fire-break so that the smallest chap at the bottom is not burnt to a crisp by their customers. There is hope yet that some of these big retailers can learn from some of their smaller suppliers.


Mark Spiteri image
Mark Spiteri