Following the recent announcement of my re-appointment as Adjudicator, I am looking forward to continuing my work to ensure that designated retailers (Retailers) treat their groceries suppliers fairly.
The sector faced a series of challenges during my first term, including Covid, inflation and shortages of inputs, drivers and labour. I was pleased that the GCA responded to ensure continuing high levels of Code compliance. I intervened proactively to improve Retailer behaviour and to strengthen relationships between Retailers and suppliers, enabled by the information that I received from suppliers and by the Retailers' engagement with the GCA's collaborative approach.
I hope to continue to work with you all throughout my second term to prevent Code breaches and ensure that suppliers are treated fairly and lawfully.
The 2024 survey results are in!
I was pleased to publish the results from my 2024 annual survey last week.
Firstly, I want to thank everyone who responded to the survey. There were more than 3,000 responses in total, providing vital information about the 14 Retailers' behaviour. This information is informing conversations I am having with each Code Compliance Officer (CCO) about changes their Retailers need to make to ensure they are treating suppliers fairly and lawfully.
The results of the survey show several areas of improvement with the overall number of suppliers experiencing a Code issue falling 3% to 33%. Suppliers were asked about 10 issues using the language of Code paragraphs; for these, there was a decrease in the number of suppliers experiencing six of the issues while the scores were unchanged for the other four.
The biggest change across all issues was in how Retailers are managing cost price increases (CPIs). As the rate of food price inflation has dropped, the number of suppliers who requested a CPI fell from 91% in 2023 to 67% in 2024. At the same time, Retailers' management of CPIs is no longer the most reported issue as the number of suppliers raising it fell from 28% to 16%.
Last year, I wrote about how the rise in issues relating to CPIs was likely exacerbating other issues including data input errors and inadequate processes and procedures in place to enable invoice discrepancies to be resolved quickly. It is, therefore, no surprise that as CPIs have reduced as an issue, both of these issues have also been reported by fewer suppliers. 21% of suppliers raised concerns about invoice discrepancies (down from 25% but now the most raised supplier issue) while 11% of suppliers highlighted data input errors not being resolved promptly (down from 16%).
For the first time, the survey included a question about how the Retailers are requesting cost price decreases (CPDs). CCOs know that I expect Retailers requesting CPDs to follow the principles of my 7 Golden Rules including clear communication, fair use of information, support for buyers, and no automatic de-lists.
Only 5% of suppliers raised this issue in the survey but I encourage any suppliers with concerns about a Retailer's negotiation of CPDs to contact the CCO or me. Your confidentiality will be protected, whether you speak to me or to any of the CCOs.
Moving on to the Retailers' individual Code compliance rankings, there were four Retailers scoring 97% or above with Co-op coming first with 98%. The GCA is aiming to improve Code compliance across all 14 Retailers with particular focus on the Retailers where perceived compliance is lower, including Amazon, whose Code compliance score fell from 59% in 2023 to 47%.
I have emphasised to Amazon's senior leadership that it must take swift and comprehensive action to demonstrably comply with the Code. I am monitoring this action and I won't hesitate to formally investigate if appropriate and necessary to ensure Amazon is treating its suppliers fairly and lawfully.
YouGov carried out the survey on my behalf and is now conducting a series of deep dive interviews with suppliers to provide further detail about their experiences. YouGov will present their findings at my conference, during which I will also discuss how the GCA is responding to the survey results.
2024 Conference
Registration is now open for my annual conference, which will take place on Tuesday 1 October 2024. The conference is free to attend and is a hybrid event so participants will be able to join online or in person.
The conference aims to improve the culture of Code compliance, provide guidance to the sector and tackle suppliers' issues. There will be panel discussions with Retailer representatives and industry experts to explore the challenges faced by the sector, as well as, for those attending in person, a chance for networking.
You can find out more about the conference and register here.
Finally
I have just completed my regular engagement with all 14 CCOs, during which I raised supplier issues and discussed how Retailers can improve their Code compliance. The July 2024 meeting record is available here.
