Tesco is facing a supplier revolt as it looks to drive down prices as the country heads towards a recession.
A large food supplier has told the Sunday Times that it is trying to resist that demands of Britain’s biggest supermarket.
Just today, the retailer has also allegedly given some alcohol suppliers “take it or leave it” terms in an effort to protect profit margins.
These suppliers have claimed Tesco is picking out some commodities and failing to take into account the fact that many ingredients are still more expensive than they were a year ago.
According to the retailer, suppliers can survive with smaller payments because prices of items such as milk powder are coming down.
One supplier told the paper: “We’re making it clear to Tesco that the broader picture is one of continued inflation on many commodities, not just the isolated examples they have been quoting.”
Tesco claimed that it is attempting to help consumers and that is why it is looking to negotiate new terms with suppliers.
“A year ago we worked to help suppliers when commodity prices were going up – now they are coming down it has to be a two-way thing,” a spokeswoman said.
Tesco also recently extended the time it takes to pay non-food suppliers from 30 to 60 days.
