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Findel Education named in FPB’s Hall of Shame
publication date: Nov 6, 2006
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author/source: R Taylor
Findel Education is among a number of high profile retailers named and shamed by the Forum of Private Business (FPB) for using poor payment practices to bully their suppliers. The FPB’s Chief Executive, Nick Goulding, gave both barrels to retailers that are exploiting their purchasing power at the Retail Week event on Thursday, 2 November 2006.
“Big name retailers are abusing their purchasing power at the expense of their suppliers. It is becoming all too common for changes in payment terms to be introduced by retailers looking to increase their profit margins. Suppliers are left with little option but to accept the changes, for fear of losing orders if they don’t.”
The FPB, which represents around 25,000 small and medium-sized UK businesses, is currently fighting on behalf of its members in a high-profile dispute with Matalan. Mr Goulding says the high street chain’s actions have been reprehensible.
“In November last year, Matalan decided it would deduct 2% from all orders in the second half of the year. Suppliers that didn’t agree to the deduction have been left with a black hole in their accounts. This isn’t cost cutting; this is passing the buck down the supply chain.”
Mr Goulding said very few suppliers are likely to say that they are not willing to accept changes in payment terms.
“The fear of being black-balled by a customer is a very strong incentive indeed not to kick up a fuss. Large retailers know this and abuse their position of power with suppliers to bully their way to bigger profit margins.”
Findel Education wrote to suppliers of newly-acquired GLS Educational Supplies in July of this year to change payment terms to 45 days from the end of the month of invoice and to insist on a 2.5% discount on invoices. Findel Education isn’t alone in using its size to intimidate and frighten its way to bigger margins; the FPB has been collating evidence of poor payment practice in a ‘Hall of Shame’. Another 21 firms have been named and shamed, including Argos, BHS, B&Q, Homebase and Selfridges. Mr Goulding said the latest additions to the list show that the trend is accelerating.
“There is a growing culture of squeezing suppliers that has spread from supermarkets to the high street. As more and more unfair practices are adopted and passed up the supply chain, so more and more smaller firms are finding it harder to make ends meet.”
The FPB is calling on its members to continue to submit evidence, in strict confidence, of firms that are abusing their buying power. To see the FPB’s ‘Hall of Shame’, go to www.fpb.org/YXdJVedo5lMmUA.html
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