If you are looking for expert comment on Tesco being investigated by the Groceries Code Adjudicator (GCA) Mark Johnson, of Warwick Business School, is Associate Professor of Operations Management and researches supply chains.
Dr Mark Johnson said: “The GCA’s regulations should go a long way to ensuring that practices in the supply chain become more equitable. However, the regulation is only recent and Tesco cannot be fined, only investigated. I will be fascinated to see if Tesco can learn to deal with their supply base fairly after years of inequality and adversarial behaviour. After all, can you teach an old dog new tricks?
“With Tesco suffering in the battle with the discounters, and the cost of running a retail operation now so super-efficient, where can a firm that requires profit go? The option is - unfortunately - to the supply chain where they can seek price reductions for increased profit, receive payments for favourable shelf position or indirectly influence profit by improving their liquidity by delaying payments.
“But at the root of all of this it is not just Tesco. It’s the shareholders who require dividends and the customers who want low prices. Caught in this crossfire are the suppliers who, in many cases, are not powerful enough to fight back.”
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