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Originally Posted by homealone
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Originally Posted by andyl
On Tesco's results, again difficult to judge as the margin isn't published. Is usually pretty tight though I would expect the growing financial services etc to be yielding higher margins. My problem with Tesco is purely that having moved out of the High Street into its big edge of town stores, it's now moving with some speed into the convenience sector which will consume small, independent shops (some of which also house other amenities like Post Offices). The supplier relationship is also a concern as their dominant market position means they may yield unhealthy power.
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yes, I have no problem with companies being successful & making a profit, that is why they are in business.
- but as an employee of a company that supplies Tesco I know how much we have had our margins reduced, in order to help them to make that profit.
It is my opinion that the balance has swung too far in the retailers favour, comments on the BBC article I linked to, above, include one from a supplier who has had to stop supplying Tesco as it was costing him too much money  |
Unfortunately it's the same in all supply industries, I worked for a company that manufactured components for a number of car companys. Each year they demanded a 10% reduction in costs per component and it basically led us to the point where we would have to continue developing new parts as the old established components were actually selling at a loss to companies like Ford, Honda, Rover etc. Without developing new components we wouldn't have had any parts that we could sell at a profit
