Suppliers unleash on Woolies

Brad-Banducci-WoolworthsCEOSome weeks ago I wrote an article regarding the dissatisfaction amongst Woolworths suppliers. I promised to revert with comments received after conducting an informal survey.

Here are some of them:

No trust

Smaller people can’t compete

Don’t return calls

Don’t answer emails

No communication

Coles treats suppliers with more respect and is much better at communication

People at HO have lost their way

Disorientated

Trying to match Aldi but can’t

Lost it

Not transparent

Bullying

Dictatorial

And here are a few more:

  • Woolworths require higher margins than Coles across many categories and by significant double digit amounts.
  • Woolworths keep trucks waiting for hours at DC’s when you have a confirmed time and dock number, costing suppliers significantly in extra shipping costs, also inefficiency and opportunity cost.
  • Woolworths are rarely on time for Primary Freight (where they pick up from Supplier), again costing time/resources.
  • Woolworths sell scan data to scan data vendors who sell the data to suppliers. Woolworths should provide free scan data to suppliers for the supplier’s own products through WOWnet. This would allow the Suppliers to validate the promotional scan funding invoice that Woolworths send them. Suppliers should not have to pay for scan data for their own products, just for competitive products.
  • Woolworths charge the suppliers a 5 per cent warehouse allowance and then very expensive Freight Cost Recovery charges (to send stock to other DC’s) plus a monthly fuel levy. When the suppliers are already sending inventory to Woolworths free of charge, this is a gouge.
  • Woolworths Promotional Portal functionality is clunky and weak. Woolworths demand promotional spend at the same or higher levels than the previous year, but the system does not allow the Supplier to see last year’s promotions (or performance), when working out the current year. It is a deplorable system.
  • WOWnet (Supplier Portal) is very flaky, often not working and lots of delays to data.

Aside from these comments the alarming undercurrent was one of vitriol and hatred displayed by suppliers towards Woolworths, some even hoping that Woolworths would go out of business.

Woolworths and its CEO, Brad Banducci, cannot successfully turn the business around without fixing these very clear supplier relationship issues. They need to do something about it yesterday.

Stuart Bennie is a retail consultant at Impact Retailing www.impactretailing.com.au and can be contacted at [email protected] or 0414 631 702

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