Blog: Suppliers should brace for the King of tough years
Chris Brook-Carter | 13 January 2011
If you remain under any illusions as to how tough the UK retail scene continues to be - and let's face it, it will probably get worse this year - then look no further than an article on our sister site just-food yesterday, quoting Sainsbury's CEO, Justin King.
Suppliers, he said, would have to "work very hard" to justify price increases as commodity costs continue to rise.
Speaking exclusively to just-food, King said that many of the commodity cost increases, particularly on wheat, had been "widely predicted" and that suppliers should have prepared by hedging against them.
It's unusual to hear rhetoric like this in the public domain. We all know that negotiations between suppliers and supermarket buyers are robust, but they largely remain behind closed doors. That King has made these comments in public is perhaps a reflection of the inevitably more heated nature of the debate in coming months.
Over Christmas I had a couple of conversations with well-placed sources who believed we would see a small number of high profile desertions of the UK supermarket sector from within the wine trade this year.
With no sign that margin pressures will go anywhere positive again this year, who can blame them?
Here's a round-up of the top stories on just-drinks last week, featuring Pernod Ricard, soft drinks NPD, the Champagne category and international beer brands....
Heavy metal legend Bruce Dickinson - lead singer of the band Iron Maiden, for the unitiated - is clearly a man not afraid to get his hands dirty. ...
The homebrewing revival continues in the UK - and evidence has come that even the supermarket chains are taking it semi-seriously. ...
Does Pernod Ricard have something to hide? In a press conference after the release of full-year results today, only a quarter of the 100 minutes were given over to questions from journalists....
- Allegro: The shape of things to come at Pernod?
- The End of the Road for International Beer Brands?
- Pernod Ricard's Allegro cost-saving programme
- Pernod Ricard's FY Performance by Region, Brand
- US craft vodka puts squeeze on Pernod's Absolut
- Pernod bemoans tough FY as sales, profits drop
- Pernod Ricard set for CMO switch
- ASA bans Jägermeister TV ad
- Scotch whisky leaders sign pro-UK letter
- Wine Australia reports death of UK, Europe boss