Tesco has responded to today's rap over the knuckles from the UK grocery regulator, accepting the findings and pledging to make changes.
The Groceries Code Adjudicator (GCA) released a report criticising the UK retailer as, according to its findings, Tesco prioritised its own finances over treating suppliers fairly. The GCA said that these practices were in breach of industry code.
In response to this, Tesco released a statement saying it accepts the findings of the report and will "continue to build trusted partnerships with suppliers".
Tesco chief executive Dave Lewis expressed gratitude towards the regulator and accepted the findings, saying they were in line with its own investigations.
"In 2014 we undertook our own review into certain historic practices, which were both unsustainable and harmful to our suppliers. We shared these practices with the Adjudicator, and publicly apologised. Today, I would like to apologise again. We are sorry," said Lewis.
Lewis went on to say that Tesco has already implemented more of the changes recommended by the GCA since last month. "The absolute focus on operating margin had damaging consequences for the business and our relationship with suppliers. This has now been fundamentally changed," he added.
The statement said that 14 changes have been made to the way Tesco deals with suppliers since 2014, including the introduction of payment terms of 14 days for its suppliers.
While the GCA is unable to fine Tesco, it did recommended that it cease making unilateral deductions in supplier payments, correct pricing errors within seven days of being notified by a supplier and make invoices more transparent.
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by John Golden. To subscribe to ESM: The European Supermarket Magazine, click here.