Britain’s biggest retailer Tesco is facing a possible supplier revolt at the moment due to trying to put the squeeze on several of its large suppliers in order to fund a price war with rivals Asda, Lidl and Aldi. One of the largest suppliers are quoted as being in ‘Robust’ discussions to resist the demands of Tesco who are asking them for cash contributions or lower prices to help the company pass on these price cuts to its shoppers, whilst several others have held informal talks and agree on certain points. Tesco says suppliers can afford to make concessions as commodity prices for items such as milk wey which have dropped, the suppliers however insist that Tesco is selectively picking out some commodities and ignoring the vast majority that still cost more than a year ago adding that the broader picture is one of continued inflation.
Tesco, which is well known for its extensive marketing campaigns aimed towards ‘Better value’ are not immune to the economic downturn and analysts believe that the group is squeezing suppliers in order to protect profit margins.
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