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Asda asks suppliers for discounts

Asda has reportedly asked suppliers for discounts so the supermarket can cut prices by up to 10% following a tough Christmas.

Suppliers are also being asked for other payments deemed as “incremental investment”, to fund promotions and new product development, according to The Guardian.

It is not known whether Asda’s clothing arm George is directly affected.

The retailer said it plans to tighten ranges by up to 25% in some categories in order to push up volumes on the narrower range of items to get better deals from suppliers.

In December Nick Jones managing director of George told Drapers the supermarket had refocused and tightened its clothing lines for spring 16.

Andrew Moore, Asda’s chief merchandising officer, told the newspaper: “Value is an important part of it. You can see what’s happening with the discounters and other competitors. We have got to make sure our customers are getting the best value we can give them.

“This isn’t Asda coming in with a big bat and trying to make suppliers hit a particular price point. We are talking to big suppliers about what we know customers want in terms of range, assortment and quality and working with them to provide that.”

 

Readers' comments (3)

  • I hope that they are also looking at how they can reduce their margin to support the price reductions rather than relying on the suppliers taking the hit.

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  • If your margin is in doubt,just ask your suppliers to help you out!!

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  • I hope they collectively tell ASDA to stick their demands where the sun doesn't shine.

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