George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Medium to small size suppliers I would say are much more transparent with their issues and supermarkets usually fall over themselves to help when they are honest and communicate effectively!
Communication is key and timely.
Personally I would like to see at least 25% less range in supermarkets, and the first to go are those products that are heavily processed and those that have highest carbon footprint.
Before anyone starts playing the violin for Kraft/Heinz:
Their EBITDA 2020 6,669 billion $, and 2021 5,980 b $
Usual tactics will apply; source alternative products or extend own label and relay the fixtures and remove gaps. Re issue new planograms to the stores.
Heinz need Tesco more.
Explain on shelf edge POS that excessive price increases from supplier will not be acceptable to our customers, apologies for inconvenience, alternatives are displayed.
That’s what I have done 40 odd years ago.
Excessive price increases in contract are usually as a result of raw material cost increases or SC, AND the company’s failure to make their operations cheaper. Together with poor decisions in the past on debt.
Supermarkets should not be taking the whole cost increase burden, but it can be shares based on evidence.
chilting
morning...your comments are always valued.....
supermarket margins are pretty small overall..they make the profits as a result of the huge volumes as a result of serving millions of people a week..of course
but yes...the suppliers are facing tough conditions.....some as a result of climate change etc...
we have discussed M&S reducing range sizes...probably continue
https://www.theguardian.com/business/2022/jun/30/lavazza-in-talks-with-uk-retailers-over-costs-as-inflation-bites
I stand by my comments.
Basically Tesco have used the cost of living crisis as an excuse to renegotiate terms /impose terms on their supplies and hide behind the fallacy that they are doing it all to keep prices down for their customers.
In realty they are simply protecting their margins and market share at their suppliers expense.
No wonder the quality of so many products sold in UK supermarkets in so poor.
Also it sucks in - just one example - cheap Beef and Chicken that has been fed on soya - a major contributor to deforestation and climate change
)) thanks JJ
Pleasure is all mine.
Neil, "less is more", brevity is key I believe. I suggest you may have lost your way with that explanation, certainly not one of your best.
Have a good evening. JJ
Tesco and other large retail buyers negotiate base product prices 2 years in advance and this is in full sight of the suppliers margin. Margin showing all operating costs, prices are contracted and changed have to be negotiated outside the contract. If Tesco in this case do it agree with price increases it’s because they can not see justification or they don’t agree with justification and, or, Tesco don’t agree the increase in costs is being fairly split between them and supplier.
There is also market intelligence within the category concerning raw materials.
Besides base buy price there are volume discounts on sales targets being achieved, additionally listing fees for new stores, and promotional fees to support marketing.
Invoicing to suppliers for case movement costs through Tesco supply chain is separate and these case costs have probably increased due to energy/fuel etc (these are shown in suppliers operating costs for base price negotiations)
It’s not straight forward but simple as a routine if buyers and suppliers are experienced.
In truth suppliers fix raw materials and most external operations costs 2-3 years in advance regardless of what you read in the media! Swings and roundabouts as raw costs do drop below and above contract costs.
Tesco and others category reviews, negotiations, trade planning, volume forecasts etc are agreed years up front and have been for at least 15-20 years, these are automatically scheduled.
Kraft/Heinz and others have to fairly show any ‘request’ to increase base prices are split fairly between the 2 parties and are a true reflection of reality on commodity markets, or their own base growing costs.
In many cases the likes of Kraft/Heinz have their own tomato crops and farms in the case of ketchup and likely that their wage/fuel/packaging costs are putting the pressure on, not energy as it’s wholesale is bought years in advance.
It seems that views are being expressed that do not reflect the real world. Lets say I produce widgets and all my costs mean that my breakeven cost is £1. Now if someone wants to buy 1000 from me I may charge £1.50, but if someone wants to buy 1000,000 every month I may suggest a price of £1.10. But the buyer of 1000,000 ea. month may say they want to pay £1.05, a counter offer which I can agree to or maybe I will try to squeeze the price to £1.075 i.e. nearer my original ask of £1.10. If my widgets are then sold at my £1.075 with say 12 months of 1000,000 every month then if the buyer says that he wants more widgets, say 2000,000 each month, then provided my material and labour costs have not increased I may suggest his original ask of £1.05. None of this amounts to price fixing but is all about the Law of Contract offer and acceptance, and counter offers. Sorry for perhaps being boring with my explanation. JJ
I am not sure it goes into the area of price fixing Chilting...... that would be the case if there was collusion between all food retailers to remove price competition
As I thought it worked.....Sainsbury buyers may be better negotiators than Tesco buyers and can each negotiate deals for their particular companies....neither Sainsbury or Tesco or Heinz for that matter are colluding collectively in anyway to fix prices in order to reduce price competition within the market ...each is still in competition with each other as the market requires ..and Heinz are not I dont think demanding anyone sell their product for a certain set price
“Its up to the supplier to set their prices, not the retailer”
))))))
Its up to the supplier to set their prices, not the retailer.
The retailer just decides if they want to stock the product at the quoted price - no negotiation, except on volume.
Otherwise its price fixing.
The competition comes when the consumer selects the product they want to purchase from the selection available - if they don't like the selection or price they shop elsewhere..
Businesses have to make the rules or be done to.
Heinz are under as much pressure with shareholders as Tesco is with trying to keep volumes moving through and thus obtaining best prices for that volume
I suspect Sainsbury etc has to deal with similar problems ....
chilting
I guess it is all about finding the price and volume partnership--- prices go up= volumes sold go down
Tesco probably believes if they can keep the price down a bit they can shift more stock which would benefit both the customer and Heinz
but clearly a balance they both have to seek between them...
Typical Tesco trying to squeeze suppliers and then claiming that they are helping customers.
If its squeezing Heinz, just think how its smaller suppliers are fairing, especially the own brand suppliers - very unethical!!!
The next we will here is that they are extending settlement of accounts to 90 days.
https://www.bbc.co.uk/news/business-61978595