Supermarket price war hurts UK SME food suppliers


As the supermarkets battle to be top dog, research shows smaller UK food suppliers and grocers are suffering, highlighting the need for them to cut costs.

The number of small and medium-sized (SME) food suppliers experiencing financial distress has more than doubled in 12 months, according to Begbies Traynor’s Red Flag Alert report for Q1 2015.

The research, which monitors the financial health of UK companies, found that supermarkets’ turnaround strategies, generally involving slashing prices and delaying payments, is piling pressure on the smaller businesses that supply them. Begbies Traynor warned that SME food suppliers are “being flattened by this new savage landscape in the UK retail food industry”.

“[M]ass price reductions have severe consequences for less established food retailers and suppliers, particularly SME’s, who now seem to be locked in a David and Goliath-style battle; although this time it appears David can’t win,” said partner and retail expert at Begbies Traynor Julie Palmer.

Last-minute order cancellations, overzealous cosmetic specifications and the rise of discounters such as Aldi and Lidl, which import much of their stock, may see struggling UK suppliers squeezed even further, Palmer warned.

“The introduction of the Prompt Payment Code and the powers given to the groceries code adjudicator to fine supermarkets in breach of the Grocery Supply Code of Practice have only had a minimal impact, and these latest Red Flag figures indicate that they may simply be too little too late for many in the SME supply chain.”

Cutting costs

Bleak short- and medium-term growth prospects mean that smaller UK food suppliers must urgently look to cut costs wherever possible. Energy bills remain a significant expense and, as other issues have been prioritised, many businesses are needlessly paying too much.

SwitchMyBusiness.com offers a straightforward solution, cutting bills by up to 70%, with exclusive supplier rates. Thousands of businesses have already saved an average of £747 per switched meter with a call that takes less than five minutes.

Find out more

For an impartial expert option on which energy supplier is best for your business, fill in the form at the top right of this page or call 0800 411 8830

Related Articles

inspiration

8 Must watch TED talks for small business owners

Feeling a drop in motivation? TED talks never fail to fire us up. Here are some of our favourites......

Read More
lightbulb header image

Energy News 04/08/2017

Yes, the British Gas price hike is undoubtedly the story of the week, but it’s not all that’s been making ...

Read More
pylon header image

Will Energy Prices Ever Go Down?

British Gas has become the latest energy supplier to raise their prices, just weeks after the Government discu...

Read More
Excellent, 9.8 / 10

Great customer service from Bhavni Manek to set up new business contracts...

"Had an excellent customer service experience with Bhavni Manek to set up new business contracts and run me through all the details. She was very efficient at finding quotes and answering questions and made me feel reassured about the transition to new energy suppliers."

This review was posted by Emma Thomsen on the 18th of August 2017

Jessica Purnell at SwitchMyBusiness has …

"Jessica Purnell at SwitchMyBusiness has been most helpful and very efficient. Our business has made a real saving on our electricity supply and all it took was a few minutes on the telephone. Thank you"

This review was posted by David Hanley on the 18th of August 2017

Mark Weeks did an excellent job in …

"Mark Weeks did an excellent job in giving me all the information I needed and explaining everything."

This review was posted by Terry on the 18th of August 2017

This the second time I have used …

"This the second time I have used SwitchMyBusiness and i have received excellent service from Jessica Purnell on both occasions.I would recommend anyone to use this company as you know that they are acting independently and trying to get the best deal for you."

This review was posted by H Barrington on the 18th of August 2017

Mark Weeks was my contact point with …

"Mark Weeks was my contact point with this company and I have been extremely pleased with the way in which he explained everything to me in an informative, friendly way."

This review was posted by Mr CHRISTOPHER GEORGE on the 18th of August 2017