PICK 'N PAY calls suppliers to meeting to discuss food prices

January 30, 2009 |

Planet Retail 29 Jan 2009

As reported by local media, South Africa-based Pick ‘n Pay has summoned its suppliers to a meeting to discuss the issue of "high and rising food prices", which have continued to increase despite the recent sharp fall in global fuel and food commodity prices.

According to the reports, CEO Nick Badminton has written a letter to 30 of the retailer's largest suppliers, saying: "In many cases, we are being asked by our suppliers for considerable cost price increases." Badminton calls such demands "untenable - and in the case of our customers and the media, indefensible". Hoping for manufacturers' cost savings to be passed on to retailers, Badminton also writes that "the wrath of consumers and members of the general public is being directed at retail and, given Pick ‘n Pay's profile, particularly, we believe, at us. We do not believe this to be fair, given that our gross margin has not only stayed the same, but actually dropped." The meeting is due to be held in the first week of February and is likely to involve topics such as the recent depreciation of the Rand, which is leading to higher import costs for suppliers.

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