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Suppliers say Tesco, Morrisons and Iceland worst at complying with GSCOP, Aldi the best

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Tesco, Morrisons and Iceland have been found to be the three retailers least likely to comply with the Groceries Supply Code of Practice (GSCOP).

In a YouGov survey commissioned by the Grocery Code Adjudicator (GCA) Christine Tacon, 4% of over 1,000 suppliers who responded said the UK’s largest supermarket never complied with the Code, which regulates the major grocery retailers’ dealings with suppliers. A further 30% said the chain rarely complied with the Code, although this was an improvement on the 35% figure the previous year.

Meanwhile, Morrisons improved its position from last year with just 2% of suppliers saying it never complied, compared to 8% in 2014, whilst 30% said it rarely complied, down from 34%. Iceland was the worst performer with 5% (down from 9%) saying it never complied and 30% (up from 27%) saying it rarely complied with the Code.

Aldi was the best performer with 94% of the discounter’s suppliers saying it consistently or mostly complied with the Code, with none saying it never did. Waitrose, Marks & Spencer and Sainsbury’s also ranked highly in compliance.

Download the full survey results here (PDF)

Tesco’s poor rating comes amid attempts by Chief Executive Dave Lewis to change behaviour at the group following last year’s accounting scandal which prompted the GCA to launch an investigate into the retailer’s treatment of suppliers. Speaking at the GCA’s second annual conference held in London yesterday, Tacon welcomed the changes Lewis was making to Tesco’s dealings with suppliers, whilst declining to comment on the details of her probe into the retailer. Tesco is currently simplifying the deals it negotiates with suppliers, reducing the 24 different kinds of payments to and from its suppliers to just three in effort to focus on ‘front margin’.

“I think that will lead to more compliant [dealings],” she said, adding that every major retailer had made changes to the way they dealt with suppliers in the wake of Tesco’s issues.

Tesco responded to the survey by saying it was a snapshot of its business partners’ views, given that the supermarket has 3,000 suppliers in the UK, adding that it was making progress with higher levels of improvement in its practice in the last year, compared with other retailers. “Suppliers are at the heart of our business and we’ve been working collaboratively with them to change the way in which we work. Since 2013, we have taken action to strengthen our compliance processes and have established a dedicated supplier helpline in the UK,” the retailer said in a statement.

Meanwhile, Tacon told the conference audience that progress was being made across a range of significant areas in the groceries sector. The YouGov survey showed an overall drop in the number of suppliers reporting Groceries Code-related issues in their dealings with the ten largest retailers from 70% in 2015 compared to 79% in 2014. At the same time a larger proportion of suppliers would consider raising issues with the GCA – up 9 points to 47% – with concerns about retribution still the dominant reason for holding back.

“We still have some way to go in important areas but this is a clear sign we are on the right track. Suppliers are more aware of the GCA and its work and fewer now believe the GCA will not be able to do anything if they bring an issue to me”, she said.

Tacon described the past year as one of milestones – including the launch of the GCA’s first investigation – but said her collaborative approach with the retailers was making a difference. She announced that she was closing another of her top five issues after a full analysis of the way retailers handle and charge for consumer complaints. She also proposed a best practice model for future complaint handling by retailers.

“Many suppliers have told me about their concerns that they were being overcharged by retailers for handling consumer complaints about products supplied.

“I raised this issue with retailers and they have all had a good look at their processes and charges. I am aware that some have changed their approaches as a result, with one more change to be implemented in August this year.

“I found that the charges range from £0 to £45. In some retailers up to 97% of complaints are resolved in-store – which is a cheaper way of handling matters. Of those retailers applying charges, some only do so in a small proportion of cases but all retailers charge for serious failings such as product safety issues.

“I have also gone further and proposed a best practice model for future complaints handling by retailers and I am pleased to say the retailers have supported my proposal. The key elements are that retailers should: Ensure that suppliers understand the basis of any consumer complaint charges applied; Provide information to suppliers about what was wrong with the product within five days to allow the suppliers to take swift action; and aim to resolve more complaints in-store to keep costs down.”

The Adjudicator has now declared the issue of consumer complaints closed along with forensic auditing and discrepancies in charging for drop and drive performance. But she reminded retailers: “If I receive further evidence on these issues it may lead to an investigation.”

The GCA five-issue approach to optimisation of supplier-retailer relationships...How you can help yourself, on KamBlog

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