UK-based suppliers have hit out at what they describe as the “unethical” and “inefficient” working practices of Tesco’s clothing arm F&F.
Existing and former suppliers to the supermarket chain have accused it of changing and cancelling orders mid-season, and “going behind suppliers’ backs” to work with factories directly.
The concerned parties spoke out after Tesco last week announced it was “regenerating relations with suppliers” in a trading statement for the 19 weeks to January 3.
Observers speculated that Tesco was likely to overhaul its system of supplier contracts based on rebates and penalty fees in favour of focusing on sales volumes with higher sales, leading to cuts in supplier prices. The supermarket has yet to reveal the detail of its plans.
Meanwhile, suppliers have told Drapers Tesco has a long way to go to improve relations. One supplier, who asked not to be named, told Drapers she was out “thousands of pounds” after F&F requested an audit of a factory she worked with, only for the supermarket to take its business directly to the factory.
“It is totally unethical,” she said. “Working with them is really difficult. We are dealing with junior assistant buyers and they are not handling the accounts very well. They don’t have a proper business plan; they are spending a lot of money, but they don’t know what they want and keep changing their minds. It’s costing us a lot of time and money. We have switched a lot of our business to Sainsbury’s as a result.”
Another supplier, who pulled out of Tesco last year, had a similar experience: “They decided to cut out the middle man, which we are seen as, and go direct to factories, making some variations on our designs. It was a mess. I was surprised by how inefficient they were and the supplier abuse was at a breathtaking scale.”
A third business, which also cut ties with Tesco a few months ago, said: “Working with them was an absolute nightmare, the worst experience of my 30-year career. They cancelled orders mid-season and they wouldn’t take stock they had ordered. We were left with 50,000 pairs of jeans at one stage. They were overbuying. The buying and merchandising team changed so frequently and the new team did not own up to what the previous team had bought. It was a complete mess.”
Tesco said it had not received any complaints from suppliers. A spokesman added: “On the occasions when we do move our buyers around it is not in order to make life difficult for suppliers but as a result of changes in personnel. We try to keep this to a minimum and realise the value of continuity.
“We work extremely hard to order the amount of stock we think we will sell and are not aware of any supplier experiencing any problems. We insist on auditing all our suppliers and the factories they use. As a rule, we don’t try and then use UK based suppliers factories as direct sources for F&F.
“We would welcome a conversation with any supplier who has experienced any problems.”
Tesco revealed a 0.3% drop in like-for-like sales for the six weeks to January 3 and a further slump of 2.9% in the 19-week period, an improvement on the previous quarter during which they slumped 5.4%. Online sales of F&F clothing during the six-week Christmas period were up 52.4%.