UK-based shopper-management firm Bridgethorne has called on FMCG suppliers to be prepared for their own ‘Marmite-style’ conversations about price with retailers, given the current challenging period for sterling.
The call follows the temporary suspension of Unilever brands such as Marmite last week by Tesco.
According to Bridgethorne, ‘Changes in the economic environment in recent months may be placing some manufacturers under unavoidable cost pressure. With the value of sterling having hit its lowest value against the US dollar for more than ten years and its lowest against the euro for over four years, […] any supplier purchasing finished product, raw ingredients or packaging materials in either euros or US dollars could face a hit on its profitability.’
“We are operating in economically turbulent times, and against a background of increased utilities, insurance, fuel and labour costs, many suppliers may not be able to absorb all of these costs,” said Andrew Cole, joint managing director of Bridgethorne.
“However, if a supplier is considering a change in cost prices, it is essential that they are not only fully prepared and are clear on their objectives, but also that they take time to understand the retailer’s position in order to achieve an outcome that is mutually acceptable.”
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. To subscribe to ESM: The European Supermarket Magazine, click here.
