Former senior Asda buyer Ged Futter argues that the audit burden placed on producers has got out of hand, making the case for a more pragmatic and light-touch way of working
The burden that is placed upon suppliers by UK retailers is astounding and incredibly expensive. As a buyer, this was one of my biggest frustrations and it still is. Who picks up the cost? Clearly the expectation by the retailers is that it is picked up by the supplier, but that cost is just added into the cost price as the ‘cost of doing business’.
The cost of an audit by a retailer can be £2,000-£4,000 per audit. I was speaking with one of my clients, who deals with all of the retailers, and they were audited 40 weeks of the year! Each audit requires a team of people from the supplier on the day and then there is the follow-up. When dealing with one of the retailers, 75 per cent of their responses were rejected. This is a business that has grown from a staff of two to 27, just to deal with specs/technical and NPD.
All the retailers have their own versions, and some have more than one. One of the premium retailers is introducing a third audit, on top of the two they already carry out. And yet the volumes they buy, compared to any of the top six retailers are miniscule.
The other question to ask is: are audits needed every year in every category? Does an apple or pear supplier need an audit every year? What is the food safety risk? It is all driven by fear and a culture of blame? The whole industry has become risk-averse, and this is adding costs and pressure to growers and suppliers.
Here is a list of all the potential audits that an apple or pear grower may get in a year: Red Tractor, LEAF, BRC, SMETA, ETI, GRASP, Home Office (unannounced), as well as unannounced retailer audits.
Audits can take anything from one to three days to complete, often at peak times of the season, such as picking. These audits are not optional and very often they repeat work that has already been done.
There is a simpler way of doing this. One of the retailers is already doing it: Aldi. They only get involved when there is a serious incident; they have an independent technical function without many updates to their policies; and they take a pragmatic BRC-based approach. This is what I was told by an ex-colleague with over 30 years’ experience in the industry.
Working with UK retailers is complicated, expensive, and time-consuming. Is it any wonder that exporters look at the UK and are turning away for simpler, more profitable markets?
Ged Futter is a director at The Retail Mind, a groceries retail consultancy that aims to improve relationships between retailers and suppliers. It shows businesses what it is like to be a retailer, putting suppliers in their shoes, and then demonstrating the best approaches to working with them. Prior to this Futter was a director at the Groceries Supply Code of Practice (GSCOP) and a senior buying manger in grocery and then frozen foods at Asda.