The latest GCA annual survey, which garnered more than 3,000 responses, revealed a 3% drop in the number of suppliers experiencing a Groceries Supply Code of Practice (GSCOP) issue – falling from 36% to 33%.
The GSCOP was introduced in 2010 and protects suppliers from unfair commercial practices. It regulates the behaviour of 14 retailers: Aldi, Lidl, Morrisons, Tesco, Sainsbury’s, Asda, Marks & Spencer, Ocado, Home Bargains, B&M, the Co-Op, Waitrose, Iceland, Amazon and their subsidiaries.
Key results of the GCA 2024 survey
The results of the eleventh annual survey showed an improvement in cost price increases (CPIs), with suppliers requesting at least one CPI from a retailer over the last 12 months falling from 91% to 67%, in line with food inflation dropping.
Moreover, the number of suppliers highlighting a retailer’s response to a CPI as an issue almost halved, from 28% in 2023 to 16% in 2024.
The survey also found several other improvements, with 79% of suppliers reporting that adequate processes to resolve invoice issues are now in place – a 4% increase from the year prior.
For the first time, a question on cost price decreases (CPDs) was included in the survey; revealing that 5% of suppliers have concerns over how CPD have been requested.
Improvements in data input error management were also highlighted, with a 5% drop from last year in complaints over errors not being resolved promptly (11% vs 16%).
‘Suppliers do not believe that Amazon is complying with the Code’
Despite an overall improvement, Amazon’s results were a clear outlier, with its perceived Code compliance score falling from 59% to 47%.
The GCA has informed the retailer it must take “swift action” to demonstrably comply with the Code and that its progress will be monitored.
Commenting, Mark White, the Groceries Code Adjudicator said that although he is “encouraged” by the overall results, Amazon’s compliance scores are worrying.
“In good news, suppliers’ experiences improved compared to 2023. However, I am concerned about Amazon’s overall Code compliance score. Less than half (47%) of suppliers perceived that Amazon mostly or completely follows the Code; down from 59% in 2023. I have also heard from many suppliers about the issues you have faced when supplying Amazon,” he told Food Manufacture.
Overall compliance scores across the 14 retailers ranged from 98% to 47% with an average compliance across all 14 Retailers of 91%, compared to 92% in 2023. If you exclude Amazon that average rises to 94%.
For the first time, Co-op came top of the 14 retailers for overall Code compliance with 98% - this is a 2% lift for the retailer. Lidl also witnessed a 2% improvement.
“From Co-op in first to Amazon in 14th place, all the retailers still have changes they can make to improve how fairly they are treating their suppliers,” White continued.
“As part of my collaborative approach to regulating the retailers, I am already speaking to all the Code Compliance Officers (CCOs) about their improvement plans in response to their individual survey results. This work will continue over the following months.”
White told Food Manufacture that his ‘collaboration approach’ has proven to be the most effective way to quickly resolve issues: “In the first GCA survey in 2014, average compliance with the Code was 75% and almost four-fifths (79%) of suppliers had a Code issue. In 2024, average compliance had risen to 91% and the number of suppliers with Code issues has dramatically fallen to one-third (33%) of suppliers.”
‘I will not hesitate to launch a formal investigation’
However, he said if such a tactic does prove insufficient going forward, he will not hesitate to change tact: “If a collaborative approach is not the most effective way of influencing a retailer’s behaviour, then I will use my other powers including investigation.”
On Amazon specifically, he added: “When I told Amazon about its survey score and the issues suppliers reported, I emphasised that compliance with the Code is a legal requirement. Amazon must take swift and comprehensive action to demonstrably comply with the Code and it should tell its suppliers what it is doing to achieve that.
“If I believe that there are reasonable grounds to suspect that Amazon may have broken the Code and it is not rectifying the issues, I will launch an investigation if appropriate, necessary and the quickest way to bring about change.
“I encourage all suppliers to keep providing me with evidence about your experiences with Amazon. I will keep whatever you share completely confidential. I want to also hear from suppliers with issues with any of the other 13 Retailers. My contact details are on the GCA website.
“You can also contact the Retailer’s CCO who can help to resolve your issue. All the CCOs have committed to confidentiality and the retailers have all committed to ensuring suppliers do not face negative consequences as a result of raising issues.”
'We are very disappointed'
Responding to the results, an Amazon spokesperson said: "We are very disappointed by these results and we are committed to improving them.
“Amazon takes the Groceries Code extremely seriously and we have introduced robust compliance procedures for our suppliers.
“We have made a series of improvements to our grocery supplier experience since last year’s results, with clearer explanations for cost price increase decisions, minimum periods for de-listing, and the launch of a major upgrade for handling invoice disputes.
“We will be making further changes, with faster time-frames to resolve more types of financial disputes, as well as strengthened account management support for smaller suppliers.
“There is still more to do. We are committed to working with the Groceries Code Adjudicator, building long-term sustainable relationships with our suppliers, and continuing to create opportunities for suppliers of all sizes to reach millions of customers in the UK and around the world.”
As part of its commitment to improve its supplier experience, Amazon has established a dedicated team who are focused on implementing improvements based on the findings and feedback from this survey throughout the course of the year. It has also been engaging with suppliers directly through its feedback panels.
It has implemented several changes already, including the launch of a new dashboard that allows suppliers to raise and resolve disputes faster, and provides access to real-time data on shipment variances in advance of deductions being applied.
It has also introduced a new process which provides suppliers with the status of requests for cost price increases, as well as clearer explanations of decisions, alongside the roll-out of a minimum notification periods prior to a product being de-listed.
As the GCA's White heads into his second term as Adjudicator, he said the focus is ensuring all retailers are complying with the Code.
“I will not hesitate to take whatever action is most effective to ensure this is the case.”
In other news, Wrexham-based Jones Village Bakery has been acquired.
