Swazi Pick n Pay boycotts suppliers

Swazi Pick n Pay boycotts suppliers

FMCG SUPPLIER NEWS

IOL Business - Feb 1st, 09:28

In a rare case of consumer empathy, retailer Pick n Pay has reportedly boycotted some of its suppliers who did not agree “to drop their prices so that customers can benefit”. 

Products by Kellogg, Simba, Johnson & Johnson, Listerine, Aquafresh, Pampers and other brands have confirmed being put on ice at the company’s Swaziland operations.

The move, according to a notice posted at a Pick n Pay store in Mbabane, was part of a combined boycott against expensive suppliers at Pick n Pay’s international head office in South Africa.

Local branch manager Mario Fernandez told the Swazi Observer that customers were already experiencing shortages of some products.

Peter Arnold, Pick n Pay’s head of food merchandising, said:

“Most of our suppliers have responded well and we have negotiated new pricing. (But some) have not responded as well and are sticking to previously decentralised pricing despite the cost savings to them.”

Pick n Pay would replace certain products on its shelves while terms were negotiated.

Yesterday the group refused to name products, suppliers and outlets affected and would only say: “The priority is to settle with these suppliers before taking it further. Discussions are (under way) with all suppliers and we tend to resolve differences very quickly.”

Analyst Chris Gilmour at Absa Investments said this was a refreshing move by a retailer as suppliers were often expensive. However, he added that this could mean that Pick n Pay had a back-up plan to replace these brands with the already available brands in its stores.

“These are very popular brands which are consumed by the general public, if they are not found on the shelves consumers might buy alternative brands that are already available at the store.”

Gilmour warned that this could be a lesson to local suppliers, whom he said were generally expensive and lacked global competitiveness.

“In the past, retailers have used cheaper global suppliers. This should (be) a lesson for suppliers. It is not the retailer’s fault. There is no reason… consumers should pay so much for food and other goods because South Africa has the cheapest land, labour is also relatively cheap and its transport costs are low compared (with) global competitors,” he said.

Retailers including Shoprite and Spar still offer the products in question at their outlets