Last week’s Blog, in which I highlighted some questionable business practices allegedly taking place at an unspecified retailer, seems to have struck a chord – or touched a nerve, depending on which way you look at it. Interestingly, although I didn’t name the retailer in question, an awful lot of people seemed to instantly recognise who I was referring to. I guess that shows how widespread the problems are.
Several people were kind enough to expand on the initial story. One person explained to me how skimming can go on undetected (apparently, the trick is to take from the bottom of the carton, not the top, so it is less likely to be detected), while another put a monetary figure on the losses; his shortages doubled from £10,000 in 2015 to £20,000 last year. He also pointed out that if he doesn’t get to grips with it, that means it could easily be £30-40,000 before too long. But ‘getting to grips with it’ is, by all accounts, not an easy task. The retailer’s recommended carrier often can’t supply the necessary paper work to allow suppliers to successfully dispute the claim, a challenge compounded by the fact that digital screens can’t be stamped. Someone else suggested that he believes the retailer’s software ‘randomly’ throws out shortages. Disputed marketing contributions are apparently another major issue. All of these queries are apparently not helped by buyers moving on, but suppliers not being told who the new buyer is due to company policy, making dispute resolution infinitely harder. Maybe it genuinely is just the sheer scale of the administrative burden, rather than any nefarious activity, which is the underlying issue here. But whichever way you look at it, the sums involved are not small, and it’s hard to see them as anything else other than an account charge or a tax on doing business. Oh, and the ‘secret’ retailer is still apparently refusing to accept price increases, especially it seems from small and medium size companies. As one supplier so succinctly put it, “the art of blackmail is not dead”.
Anyway, on to happier things. It has been announced that Lego has a new vice president and general manager of its UK and Ireland business unit, Marina Edwards, who was previously senior commercial director for juices and cereals at Pepsico. We wish Marina all the best in her new role.
Also on the good news front, Argos’ results for the first nine weeks of the year show an increase of 4.3%, more than making up for Sainsbury’s 0.5% decline in the same period. According to some suppliers, there are still some teething issues to overcome on the logistics front, but the early signs appear encouraging.
Finally, I’m delighted to see that Vivid has resolved its share ownership situation, with a deal with Privet Capital having been confirmed earlier this week. It’s onwards and upwards for Vivid; they have some very strong new introductions for 2017 which they can now focus on getting behind. And what’s not to like about a hedge fund called Privet?! (I apologise if Privet is not technically a hedge fund, but it was just too good a gag to turn down…thanks to my old colleague Andy Myall for that belter).