Inflationary pressures strain relationships between retailers and suppliers: GCA

Inflation has weakened the relationships between the UK’s designated retailers and their suppliers, the Groceries Code Adjudicator’s (GCA’s) 2022 sector survey revealed on Thursday (9).

A quarter (26 percent) of suppliers said they had experienced a refusal by a retailer to consider a request for a cost price increase (CPI) or an unreasonable delay from the retailer in concluding the request. It is the most raised issue in the GCA’s surveys over the last five years.

Overall, 80 percent of suppliers had asked for at least one CPI in the previous 12 months. After year-on-year improvements in retailer-supplier relationships to 2021, the survey now shows a fall in the number of suppliers not facing any Code-related issues from 56 percent in 2021 to 47 percent in 2022.

The results, from the survey run by YouGov, suggest that following two years of pandemic where retailers and suppliers worked closely together and improved their relationships, the pressure from rising prices has strained relationships, and Code-related issues between the two have also risen.

Mark White, the Groceries Code Adjudicator said, “Inflation has affected the entire groceries sector as witnessed by the sheer scale of requests from suppliers to increase prices.

“I am concerned that the pressure has impaired relationships and created wider problems. My priority is to work with all the retailers to ensure they treat their suppliers fairly as they navigate the cost price process during this difficult time.

“It is also important that suppliers confidentially report any issues they have so I can take them up swiftly with the retailers.”