Pick n Pay boycotts 'expensive' suppliers

2 February 2012
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2 February 2012 | Angeline Albert

Supermarket retailer Pick n Pay has stopped stocking some of its suppliers products in its Swaziland and South Africa stores because it says their prices are too high.

Individual stores previously set their own contracts with suppliers, but the company is moving to a centralised structure that has led it to examine prices and seek to renegotiate deals.

Pick n Pay's food merchandising director Peter Arnold said in a statement: "Most of our suppliers have responded well and we have negotiated new pricing. [But some] have not responded as well and are sticking to previously decentralised pricing, despite the cost savings to them."

A shortage of Kellogg's cereals, for example, is expected at the retailer’s Swaziland operations, according to a notice posted at a Pick n Pay store in Mbabane. The retailer is refusing to stock the items until suppliers agree to reduce their prices. Other household name products from a fast-moving consumer goods company are currently not being stocked.

Tamra Veley, a spokeswoman for Pick n Pay told SM that “destocking is a last resort and we expect to resolve differences in the short term”.

The South African retailer has 775 stores, including hypermarkets, supermarkets and smaller family stores. It employs more than 38,000 people and sells food, clothing and general merchandise. It is replacing certain products on its shelves with alternative brands until price negotiations are resolved.

At the time of publication, Kellogg’s had not responded to SM’s request for a statement.   

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