Groceries Code Adjudicator Mark White has been left “disappointed” by a new “deep dive” report that looked into the views of suppliers over the conduct of supermarkets under the Groceries Supply Code of Practice (GSCOP).
While compliance with the code has increased by 19% since 2014 to 92% in 2023, the report found that supermarkets are not taking collaborative action to handle a rise in CPI requests, The Grocer reported.
In a speech to suppliers and code compliance officers, White said: “Suppliers mentioned ‘combative’ retailers who have returned to pre-pandemic behaviour, leading to stalled innovation.
“This issue, particularly when negotiations have been conducted poorly, has had a significant impact on the relationships of retailers and suppliers.”
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He added that “suppliers feel there is now less good faith shown by retailers in CPI negotiations” as supermarkets were found to be “less invested in the continued relationships with their suppliers”.
The report also highlighted that some major retailers have begun asking for cost price decreases, “accompanied by delist threats, forcing suppliers to operate at a loss, which they feel has created an unfair playing field and changed power dynamics”.
An anonymous supplier described 2022 as “warfare”, claiming individuals in supermarket buying teams were looking to “punish” suppliers as a result of them getting price increases through.
White has said all 14 retailers under the code “need to consider what they can do to reignite the collaborative engagement that was in place during the pandemic”.
“Without positive relationships the shelves will not be full and consumers will not enjoy the choices that they have when they do their shopping.”
This comes as Tesco and Aldi dropped in the rankings of the Groceries Code Adjudicator’s 2023 annual survey as a challenging trading period strained relationships between suppliers and retailers.
