The nation’s leading packaged grocery suppliers, from tinned vegetables to laundry detergent makers, will get their first chance in 2023 to hear from Coles executives about the supermarket’s strategies for the year at a suppliers forum this month.
Coles has decided to launch its first suppliers forum purely for packaged or dried grocery suppliers – which will be held on February 21, the same day as it reports its half-year results – as it updates them on key priorities, including consumer trends, e-commerce and the looming opening of its new automated warehouses.
It could also provide an opportunity for Coles and their packaged grocery suppliers to further discuss the inflationary pressures, with food inflation hitting 10 per cent for the December quarter.
Suppliers are facing increasing cost pressures within their own business, such as energy, transport, raw materials and labour, and these are being pushed back down the supply chain to the supermarkets as they knock on the doors of Coles and Woolworths for price hikes.
Coles executive general manager of packaged grocery Jonathan Torr, who will present the suppliers forum, said: “This will be an opportunity for us to share our strategic plans and work in collaboration with our supplier partners to grow our businesses.
“We also want to share more about our operational and omnichannel plans, what this means for our suppliers and how we can work together to drive the best results for our customers.”
An update to supermarket suppliers on Coles’ omnichannel and e-commerce plans will be keenly sought, with the retailer reporting in August at its full-year results that a supply-chain deal with provider Witron – which will develop two automated distribution centres – would ultimately cost $1.04bn, up from an original slated cost of $950m.
A partnership with Ocado for an automated fulfilment centre to fuel its e-commerce ambitions would now cost about $330m, up from an original price tag of $130m to $150m, as the scope and size of the key infrastructure to power its online shopping ambitions was expanded.
In June, Coles revealed it was reviewing the way it dealt with supplier requests for price rises as inflation forced its food and grocery suppliers to make multiple requests for cost increases.
In December, Coles was accused of not acting in accordance with the spirit of the Food and Grocery Code of Conduct and not complying with the voluntary code that covers the nation’s biggest supermarkets – Coles, Woolworths, Metcash and Aldi – and that the process of the Coles independent arbiter to deal with supplier complaints was flawed.
Independent reviewer Chris Leptos criticised Coles for its adherence and the role of the Coles independent arbiter, former Victorian premier Jeff Kennett, whose role is to handle and oversee complaints from suppliers.
In response, Coles said it disagreed with Mr Leptos’s conclusions and that it was committed to working with its suppliers in a “fair and transparent way”.
Coles is slated to issue its December-half results to the market on February 21. “We project Coles to continue to regain some of the market share that it lost during Covid-19,” Credit Suisse analyst Grant Saligari said.
Extracted from The Australian
