The Co-operative Group, the UK retailer, is looking to put certain contracts out to tender in a bid to consolidate its supply base, a source has told just-food.
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The moves are part of a fresh round of negotiations between the Co-op and its suppliers as the retailer looks to improve payment terms and consolidate its supply base.
A source at one of the retailer’s suppliers told just-food that the Co-op has also “made it known” that it is preparing to re-tender supply contracts, in order to consolidate its supply base.
“At a time when many food makers are already struggling, this is adding another level of pressure. It could make certainly things a bit more tricky,” the source said.
According to reports, the UK retailer has asked its suppliers to cut their prices by between 5% and 10%.
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By GlobalDataA spokesperson for the Co-op said that it was unable to comment on the negotiations in order to protect “confidentiality” of the process.
Speaking to just-food, the spokesperson said that the group had indicated that it intended to renegotiate improved terms with suppliers in March, when it acquired Somerfield in a deal worth GBP1.57bn.
However, the company emphasised that it remains committed to building sustainable relationships with its suppliers.
“These negotiations are being conducted on a fair, commercial and constructive basis,” the Co-op said.
