The news reported in THE AGE newspaper that Woolies stand accused [again] of bullying suppliers and abusing their duopolistic position in the market is hardly breathtaking news. http://www.theage.com.au/national/woolies-accused-by-food-suppliers-20120705-21k9m.html “Woolies accused by food suppliers” lead story, FAIRFAX 6th July.
The supermarkets, mainly, and the retail sector in general, have form on this issue – see previous blogs # 335, 323, 289, 265 and particularly blogs 306 and 304 and 301, then blog 344 for a neat summary. Much form then; and a tradition of table-thumping in front of small suppliers. A culture even.
Of course, as it stresses in the news article, the ACCC are on the case – reportedly over 50 suppliers coming forward to “dob in” the supermarkets’ behaviour in response to the ACC Chairman Rob Sims’s call to do so back in February … see blog #344 again.
However, many more suppers didn’t report in to the ACCC – maybe in fear of the consequences.
What the retail sector don’t seem to get is that there is value in being valued as a customer …. a longer term [and sometimes a shorter term] benefit from doing so. In a relatively small market like Australia, SRM pays back – more than overly competitive and aggressive behaviour does. Seems the supermarkets don’t have the confidence to try? They might lack a vision of what success truly looks like; and maybe they don’t see how to measure any benefits from working more co-operatively with suppliers?
Maybe it is the consequence of treating suppliers as commodities? They have few strategic suppliers, and a very long tail indeed – thousands of small suppliers. Maybe investing more in supply management, and in the professionalization of their buyers would help – it reputedly helped Marks & Spencers in the UK according to former CEO & Chairman Sir Stuart Rose - when he spoke at the CIPS annual conference in the UK some time ago … after putting many of their M&S buyers through MCIPS – an almost unique move for retail buying at the time.
The Buyer – posted 6th July 2012
The views of THE BUYER are personal and are not necessarily those of Procurement Professional magazine, BTTB Marketing nor CIPS.