Treatment Of Grocery Suppliers Improves Despite Significant Fall In Amazon’s Code Compliance Score

Results from the Groceries Code Adjudicator’s (GCA) annual survey reveal that fewer suppliers have been experiencing issues with the UK’s 14 leading grocery retailers. However, less than half of respondents directly supplying Amazon believed that it consistently or mostly complies with the Groceries Supply Code of Practice (the Code).

The eleventh annual survey received more than 3,000 responses, with the number of suppliers experiencing a Code issue falling from 36% to 33%. The GCA Mark White noted that there was a significant improvement in relation to cost price increases (CPIs). As food price inflation eased, the number of suppliers which requested at least one CPI from a retailer over the previous 12 months fell from 91% in 2023 to 67% in 2024. The number of suppliers highlighting a retailer’s response to a CPI as an issue almost halved, falling from 28% to just 16%.

The 2024 survey results showed that there has also been improved performance against other issues impacting suppliers. 21% of suppliers highlighted inadequate processes in place to enable invoice discrepancies to be resolved promptly, compared to 25% of suppliers in 2023. Meanwhile, 11% of suppliers highlighted data input errors not being resolved promptly, compared to 16% in the previous period.

The survey also included a question on cost price decreases (CPDs) for the first time; only 5% of suppliers highlighted concerns about how a CPD had been requested by a retailer.

Despite the overall improvement in the treatment of suppliers, Amazon’s perceived Code compliance score fell from 59% to 47%. White revealed that he has told Amazon that it must take swift and comprehensive action to demonstrably comply with the Code. The GCA is monitoring changes that Amazon is making and their impact on suppliers to determine whether they are sufficient.

“I am encouraged to see improvements in retailers’ treatment of suppliers across a range of issues, including the management of cost price increase requests but also resolution of invoice discrepancies and data input errors,” said White.

“However, the survey shows clearly that many suppliers do not believe that Amazon is complying with the Code. Amazon must ensure suppliers understand the changes it has made since its designation and in response to these survey results, and make any further changes that are needed to ensure Code compliance.

“I will not hesitate to launch a formal investigation if appropriate and necessary to ensure Amazon is treating its suppliers fairly and lawfully. I encourage suppliers to continue to confidentially tell me about the issues they are facing with Amazon.”

Overall compliance scores across the retailers ranged from 98% to 47%, with average compliance across all 14 retailers of 91% compared to 92% in 2023. Excluding Amazon, average compliance was 94%, which was unchanged from the non-Amazon score in 2023.

For the first time, Co-op came top of the 14 retailers for overall Code compliance with 98%. Co-op and Lidl both experienced a 2% improvement, which was the biggest percentage improvement across the 14 retailers.

The retailers are ranked by their overall compliance with the Code. The percentage comprises those who rated that the Retailer “consistently well” or “mostly” follows the Code.

Download the full GCA 2024 survey results

NAM Implications:

• It is patently obvious that GSCOP retailers are ’behaving themselves’ in terms of Code compliance….
• …presumably preferring a collaborative path forward with suppliers.
• Amazon’s apparent difference is explained here by Amazon Strategy Consultant Martin Heubel.
• Key that suppliers keep Mark White in the loop as the grocery trade becomes more competitive…
• (And also important that ways be found to apply GSCOP to other retailers)