Survey: Two thirds of Tesco’s suppliers fear they will be forced to cut jobs
Tesco Ireland has committed itself to using its British parent company’s special offer cycles and products and that has meant a dramatic downturn in the amount of Irish products it is willing to sell in bulk.
The company has made the move because it believes it is losing a huge volume of sales to its competitors in the North due to the weaker value of sterling.
As it said in one managerial presentation: “Having invested circa £3 billion (€3.4bn) in Ireland, the damage to the Tesco Ireland brand by our almost exclusive association with the retail premium versus Northern Ireland is unacceptable.”
Therefore it is trying to reduce prices here by introducing products sent from its British headquarters and is also reducing the space allotted to Irish products. It is also seeking to renegotiate prices with the remaining Irish suppliers. At least two of Ireland’s biggest food producers have been told they are to lose space and are therefore planning to cut jobs.
An online survey by Irish International BBDO was sent to 32 senior managers in Irish Fast Moving Consumer Goods suppliers who sell their products in Tesco. The surveyors received 27 responses.
Of those, 63% said they strongly agreed that Tesco’s trading and sourcing policy would put jobs under threat at their company and a further 11% agreed.
Just 4% strongly agreed that the new sourcing and trading policy adopted by Tesco was in the best interests of the consumer.
On the question of whether their overall business would be damaged, unsurprisingly 63% strongly agreed and 33% agreed.
Almost 80% strongly agreed their shelf space had been reduced and 15% merely agreed.
Of those surveyed 63% strongly agreed that the Tesco decision damaged the ability of Irish suppliers to compete both at home and abroad.
Finally the report found 73% believed the Government had done too little to help Irish food suppliers.
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