Tesco pressures suppliers to drop prices further

Tesco is putting even more pressure on suppliers, asking that they lower their prices or risk being cut from the supermarket shelves.
Falls in prices of certain staple ingredients like sugar and wheat are, according to Tesco, grounds for dropping the prices suppliers sell at, and it is through this that Tesco are pressuring their suppliers.
This comes just a few days after the Grocery Code Adjudicator begun to probe the superstore chain over claims that it charged massive sums of money to place supplier products on more prominent shelves, and that payments due to suppliers were delayed.
The store argued that if the suppliers cut the prices as it requested, the store would pass those savings onto customers, but some suppliers told the Sunday Times that they had received no assurance that the customers would benefit from the hypothetical dropped prices.
The store is seeing massive image problems recently, especially considering the £264m black hole that appeared in their accounts last year. This bully-esque behaviour towards the suppliers is only aggravating this image problem, and with declining shares of the market, Tesco may suffer as a result.
Of course, Tesco need to do something to boost profits and try to get back on its feet. It has seen a plethora of sackings and suspensions amongst the senior management staff. By cutting down on expenses would help it boost profits, both through spending less, and attracting more customers through lower prices.
Tesco said: “We work with over 3,000 suppliers across the UK and hold regular discussions with them on how to provide the best products and great value for customers.”