Independent retailers whose symbol groups are merging with Tesco or Co-op could risk losing their point of difference as they may find it harder to manage consistency and relationships with suppliers, experts have warned.
Under the Groceries Supply Code of Practice (GSCOP), businesses with an annual turnover greater than £1bn must provide realistic sales forecasts based on factors such as merchandising and pricing, or face a penalty.
As larger companies take over symbol groups, problems could arise in maintaining uniformity across the estates.
JW Filshill retail sales director Craig Brown warned about the impact on a Booker or Nisa retailer’s point of difference as a result of the multiples needing to comply with the code.
He told RN: “The question is whether a retailer’s differentiation will be taken away in terms of price and range. Tesco and Co-op are used to managing stores with a complete degree of compliance. Strain might be caused by trying to continue this with the addition of independently-run stores, while trying to appease the suppliers.”
AG Parfett & Sons chairman Steve Parfett agreed. He said: “GSCOP has already been made more complicated with the addition of independently run businesses, which doesn’t give suppliers any more confidence existing agreements will be honoured.”
However, retail expert David Sands, who runs three Nisa shops, doubted retailers would lose their differentiation, if and when the £143m Co-op/Nisa merger goes through. “I doubt Co-op can get away with unrealistic demands on pricing and range if the merger goes through because there’ll be an uproar from retailers,” he said.
Raaj Chandarana, of Tara’s Londis in High Wycombe, added: “Charles Wilson comes from independent retail and I trust he’ll keep our interests in mind.”
GSCOP was established by the Groceries Code Adjudicator to ensure a fair relationship between suppliers and supermarkets.