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Annual Report March 2015

Working Together, Making Progress The GCA Securing Change Sustained Progress – Year on Year

#GCA2017 #GCA2017

The GCA and the Frozen Food Sector Update on Current Priorities and Issues

November 2017

GCA’s 4 Years: Making Progress, Driving Change

• Culture change • Retailers asking me how to improve

• Suppliers opening up to me • Spread of training • Aware of the Code • Telling me about issues

• Progressing top issues

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3

Suppliers: How retailers comply with the Code

48% 55%

35% 38%

38% 36%

42% 36%

34% 34%

37% 46%

30% 14%

28% 21%

27% 17%

17% 13%

47% 43%

60% 58%

56% 59%

50% 58%

57% 56%

54% 50%

61% 66%

60% 67%

61% 64%

65% 67%

4% 2%

5% 4%

6% 5%

7% 6%

8% 9%

8% 4%

9% 19%

10% 12%

11% 18%

18% 17%

0% 0%

0% 0%

0% 0%

1% 1%

0% 1%

0% 1%

0% 1%

2% 1%

0% 1%

0% 2%

Sainsbury’s

Waitrose

Tesco

Marks & Spencer

Lidl

Morrisons

Co-operative

Asda

Iceland

Overall assessment of compliance with the Code Retailers ranked by net ‘consistently well’ and ‘mostly’

Aldi

4

Issues suppliers have experienced – by retailer

N.B. Retailers have been shuffled and are NOT shown in alphabetical order

All direct suppliers

Retailer 1

Retailer 2

Retailer 3

Retailer 4

Retailer 5

Retailer 6

Retailer 7

Retailer 8

Retailer 9

Retailer 10

Incorrect deductions from invoices 2% 3% 10% 11% 8% 6% 9% 6% 9% 5%

Data input errors not resolved promptly (e.g. 7 days) 2% 1% 9% 11% 7% 5% 9% 5% 8% 3% Artwork and design: Unfair, unreasonable or

unexpected charges 2% 9% 5% 9% 7% 6% 6% 4% 8% 3% De-listing without giving reasonable notice 3% 4% 7% 7% 3% 4% 4% 1% 5% 2%

No compensation/incurring penalty charges for inaccurate forecasting by the retailer 2% 4% 7% 8% 5% 6% 6% 3% 4% 3%

Drop and drive: delays in, or not receiving, payment when there are disputes over deliveries 2% 1% 6% 6% 2% 2% 5% 3% 1% 1%

Forensics: third party audits which have been abusive or excessive in nature 0% 1% 3% 6% 2% 5% 3% 1% 2% 0%

Unjustified payments for consumer complaints 2% 1% 6% 4% 3% 7% 3% 1% 6% 5% Unfair/unreasonable/unexpected charges for:

Packaging 0% 3% 3% 5% 3% 3% 2% 2% 5% 1%

Requests for lump sum payments relating to: Retailer margin shortfall not agreed at the start

of the contract period 2% 0% 3% 6% 1% 1% 3% 0% 2% 1% Other requests for lump sum payment 1% 1% 1% 3% 1% 0% 2% 0% 3% 1% Overbuying at promotional price and

subsequently selling at full price 1% 0% 1% 2% 3% 1% 1% 0% 1% 1% Requests for lump sum payments relating to:

Listing fees for products already stocked (pay to stay) 0% 0% 1% 3% 2% 0% 2% 0% 0% 1% Requests for lump sum payments relating to: Better

positioning or increased shelf space or participation in category captaincy/category management/range

reviews 0% 0% 1% 2% 1% 0% 1% 0% 1% 1% Other 0% 1% 2% 1% 2% 1% 1% 1% 0% 1%

5

Changes in retailer practice over past 12 months

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53%

44%

18%

21%

14%

22%

18%

24%

13%

19%

40%

47%

73%

67%

81%

64%

71%

57%

78%

65%

7%

9%

9%

12%

6%

15%

11%

19%

9%

15%

Tesco (n=444)

Morrisons (n=454)

Aldi (n=355)

Sainsbury's (n=404)

Lidl (n=268)

Iceland (n=172)

Marks and Spencer (n=163)

Asda (n=506)

Waitrose (n=331)

Co-operative (n=310)

35

46

9

9

8

7

7

5 4

Improved Stayed the same Worsened

Net improvement score (2017)

(improved% minus worsened%)

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Annual Report March 2015

Working Together, Making Progress The GCA Securing Change Sustained Progress – Year on Year

#GCA2017 #GCA2017

My Current Priorities and Work Programme

November 2017

My Top 5

My Top 5: Current issues

Current issues: Delay in payments

Data input errors a particular issue for frozen sector – raised by 37% of suppliers of branded

frozen foods

Current issues: Forecasting & promotions

Overbuying at a promotional price and subsequently selling at full price a bigger issue in frozen sector:

All direct suppliers - 6% Suppliers of branded frozen food – 23%

Suppliers of own label frozen food – 15%

“Retailer has a habit of overbuying on promotion meaning post-

promotion we usually see 2 weeks of no sales before base resumes”

Time to be Code Confident

Suppliers: Know the Code

• Know the Code when buyers make certain requests: – I need help to hit my half-year target, I am £200k short in

your category and I need you to make up the difference – From tomorrow I am instigating a £10 per case charge for

any case that is rejected at depot – If you want to keep the business for the rest of your

contract you need to pay me £100k

Suppliers: Get trained

• 100% buyers trained – it’s the law

• Still too many suppliers untrained – it’s a concern

– 57% not received training

– Only 20% micro suppliers trained

– Main reason – lack of knowledge

• Check out the Directory of Trainers on the GCA

website

Suppliers: Speak up

• Statutory duty to maintain confidentiality

• No report that a supplier has suffered commercial consequences for raising a Code issue

• I need your information in order to influence the retailers to improve their practices and processes

Personal priorities for the year

• Maintain supplier events and 1:1s

• Continue to reinforce training message • Remain the engine for change

• Intensifying the collaborative approach when and wherever necessary

• Always ready to use investigative powers if merited

• Encourage suppliers to raise issues with Code Compliance Officers

Suppliers: What I want from you

• Get trained in the Code

• Keep up to date with my activities • Read my website; sign up for my newsletter

• Bring me information • The more information I receive the better

• Always ready to meet suppliers on a 1:1 basis to hear issues of concern

Sign up for the GCA newsletter

www.gov.uk/gca