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Follow banks’ lead and work together

In light of the increasingly alarming financial situation some inevitable tensions have arisen in the retail supply chain this week.

Some major retailers have approached suppliers with proposals that they should help contribute to their stores’ rising running costs, reasoning that it is only fair since it is their shops that provide the brands with a platform to sell to the public. Meanwhile, given the turmoil in the banking sector, some suppliers have had their credit cover for supplying certain retailers withdrawn, which will increase the overall risk of supplying, let alone supplying and adding a bit extra to help pay stores’ electricity bills.

Who knows where all this will lead. The financial situation is changing by the hour – as I’ve been typing I’ve received a newsflash that the Bank of England, the US Federal Reserve and five other central banks have reduced their interest rates in a co-ordinated move which is intended to stabilise the faltering global economy and stock markets.
But I take some solace from the words of a retail veteran who said that, despite the unavoidable fallouts between retailers and suppliers, what downturns will do is reinforce which partnerships are worth preserving and which are not.

By focusing on the partnerships which are worth preserving and by working together and not attempting to squeeze each other at every turn, both parties will emerge stronger
for the experience. If the central banks can work together for the greater good then you would hope that it would not be too much to ask for suppliers and retailers (those that are in it for the long haul that is) to do the same.

Lauretta Roberts, Editor

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