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John Lewis demands rebate from suppliers

John Lewis is the latest retailer to have emerged as squeezing its terms, with the department store demanding a “growth rebate” from suppliers.  

According to The Telegraph, suppliers are being hit by a rebate of between 0.75% on their annual invoices with John Lewis if their sales grow by between 5%-9.9%, up to 5.25% if sales grow by more than 50%.

In the letter sent to around 130 suppliers and seen by the newspaper, John Lewis explained it had provided a “platform for growth”, which had benefited suppliers “from increased profits levels through efficiencies provided from the increase in volumes”.

The letter added: “It is therefore essential that the collaboration shown to date is continued and that John Lewis and its suppliers share the benefit created from these significant growth opportunities.”

But it has been dubbed a “bully” by the Forum of Private Business, who has already publicly attacked both Debenhams and Monsoon Accessorize for similar practices.

A Forum spokesman said suppliers were “effectively having their pockets picked by John Lewis on the back of strong trading”

Readers' comments (4)

  • Department Managers made redundant.
    Park Royal in consultation for further redundancies.
    Suppliers squeezed for rebate.

    This is not the heroic John Lewis we have known and loved even for the most green blooded.

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  • For a company that is supposedly doing so well, this is an major insult, though ultimately John Lewis are doing what many other players are doing. The suppliers don't have to agree with these new terms, so will they continue to 'support' John Lewis? Of course they will, of which John Lewis knows only too well.

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  • It is been rumoured within the trade that John Lewis are expecting suppliers with own brand stores or departments within other stores in their area to send staff to merchandise the John Lewis store. We have heard of 2 cases of this from our local John Lewis store, which adds some credence to the rumour.

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  • Unpleasant undertones.....

    Too much stock, mark down, after redundancies far too much overhead, JLP stores just showrooms for Internet customers to scratch and sniff, then too many returns from fussy customers in the chattering middle classes........

    That said would not by my digital radio from anyone else despite overpaying !

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