3 things Tesco do to build stronger partnerships with our European suppliers
8 September 2016
Tesco simplify trade terms with our suppliers in Central Europe.
Over the last year we’ve been working hard to transform our business in Central Europe – and a key part is about changing the way we work with our suppliers.
We’re really clear that to serve our customers a little better every day we need to build stronger, better and closer partnerships with our suppliers. So with this in mind we’re simplifying how we work together in three ways:
1: Transparent payment terms for all suppliers - and paying our smallest suppliers quicker
Our customers want to know we treat our suppliers fairly. And we want to work in relationships based on trust, transparency and mutual respect.
So to make it simpler for our suppliers to work with us, and to provide real transparency around the time it takes for suppliers to be paid, we’re introducing new standard payment terms. These include a new shorter term for our 1000 smallest suppliers. As a result, from October 2016 our smallest suppliers will benefit from being paid within 14 days. This is a payment term we believe to be industry-leading.
At the same time, we’re introducing standardised payment terms for our medium sized and larger suppliers. They will be paid within 30 days for food and groceries, a maximum of 45 days for non-food grocery and 60 days for general merchandise. These changes will be implemented from January 2017 onwards with our medium and large suppliers.
2: Setting up a supplier helpline
Another step we’ve taken is to launch a new supplier helpline. We’ve been piloting this in Poland since May.
What does it mean? Whenever a supplier needs help in how they work with us, they can call up, and get a resolution with 48 hours through a single point of contact. We plan to extend the Helpline to Hungary, Slovakia and the Czech Republic in the coming months.
3: Changing the way we work together
As part of our business transformation in Central Europe we’ve set up a Product team. They are responsible for everything we do in terms of buying and selling products. Everything from supplier partnerships and provenance, through to pricing and promotions.
Alongside this, we’ve set up a new Supplier Engagement Team to make it easier to understand each other and collaborate. The new team has been working hard to improve communication with our suppliers. Changes include the launch of a supplier newsletter and hosting supplier conferences. These will soon be followed by an online news service for our suppliers.
Together, these developments will give our suppliers more opportunities to share their views and tell us what more we can do to support them. They also build on similar changes we’ve been making across other parts of Tesco, including in the UK.
We know that behind every product we sell, are the businesses and the people that work with us. And we want to work together better to help our business grow.