Tension between retailers and suppliers is healthy, says Tesco

Commercial tension between retailers and suppliers retailers is a good thing, according to Richard Brasher, commercial and marketing director at Tesco.

However, in challenging areas such as obesity and climate change Brasher said industry should work together and it has written to 1,000 of its top suppliers for help in cutting carbon emissions.

Speaking at the 2010 IGD Convention, Brasher said: “I believe in commercial tension between retailers and suppliers, I believe it’s positive and healthy.”

Brasher, who takes up the new role of chief executive of Tesco UK and Ireland next year,  said competition between retailers had also served the consumer well.

“The hallmark of our industry is not cosy collaboration, it’s competition,” he said.

“All day and every day retailers compete. The gap between success and failure is narrow and there is a relentless drive to transform the product offer and customers’ lives.

“The relationship between retailers and manufacturers has attracted as many column inches as the relationships in East Enders,” he added, “but to win you have to keep raising the bar – pushing yourselves to be better and going the extra mile.”

Consumers are in the driving seat, said Brasher, but it had made the industry more efficient and creative, as a result.

Brasher denied big business stood in opposition to the small manufacturer.

“Businesses like Tesco can provide a huge opportunity to small business,” he said.

“The best ideas often come from the smallest suppliers but they lack the confidence to put them into place.”

Brasher said Tesco can foster that confidence and provide a strong route to market and gave three examples of companies which have grown their business with Tesco.

The potato supplier Branston, which started supplying Tesco in 1989, has become one of the biggest suppliers to the business, supplying all year round.

Similarly, The Isle of Man Creamery has extended its sales to the north west, while The Bury Black Puddings Company has seen sales quadruple between 2006 and 2009.

“We instantly give a supplier opportunity to touch more customers. Retailers like Tesco can liberate suppliers and release their potential,” he said.

Brasher told delegates the UK supply chain is held up as an ambition for many countries around the world to match but there were areas where industry needed to raise its game – obesity and climate change.

On rising obesity, Brasher said industry could choose to camp on its current achievements or understand those actions are not enough.

On climate change, he said Tesco has reduced carbon emissions worldwide by 16%.

“But we can’t work on climate change alone. We need to ‘green’ our products and make them mainstream and desirable,” he said.

Brasher said he had written to 1,000 of Tesco’s top suppliers to ask for help and collaboration in reducing carbon emissions on the products it sells by 30% by 2020.

“There is a suspicion about being set targets but we are genuinely asking people to join the 30% less club,” he said. “We do believe we can make more progress in making this a more impressive achievement than we’ve seen to date. The benefit for industry is in billions, a prize worth working for.”

Summing up Brasher said he was proud of competition and the benefits it had brought to the economy and society but with new conditions and challenges – obesity and climate change – it did not make sense to work alone.