Discount supermarket chain Aldi, a growing favourite among consumers, is also a recurring hit with suppliers despite challenges from inflation and the COVID-19 pandemic.
According to a new poll conducted by the Groceries Code Adjudicator (GCA), the retailer is the leader in compliance with the Groceries Supply Code of Practice. It registered a score of 98%, beating last year’s mark of 97% in its commitment throughout the supply chain.
“We are incredibly proud of this achievement as the Code reflects retailers’ relationships with suppliers, and importantly helps to ensure that they are being treated fairly,” Giles Hurley, Chief Executive Officer for Aldi UK & Ireland, said. “Many of our suppliers have partnered with us since we entered the UK market over 30 years ago. We fundamentally believe that these relationships should be based on fairness, trust and longevity providing certainty and security. This has helped Aldi to deliver to customers our commitment to provide unbeatable value.”
Aldi also was named best in terms of its fairness, good faith and minimal duress in dealing when dealing with trading partners. Consistency and performance haven’t been easy for retailers, as more than a quarter of supplier report they have faced refusals by retailers to embrace a cost price increase (CPI) or have seen further delays in completing request. More than half of suppliers have face code-related issues, an increase of 9% year over year. But Aldi has far surpassed industry averages.
“Our business model is based on efficiency and simplicity,” Hurley said. “Through our streamlined product range with a focus on exclusive own label brands, as well as running an efficient operation, we can deliver the lowest prices without compromising on the price we pay our suppliers. This has been the foundation of our success in transforming the grocery sector. We are committed to building long term relationships with suppliers and paying them a fair price whilst helping customers with the cost of their food shop.”
The survey of 2,500 individuals was done by YouGov showed Aldi out front, but Tesco and Mark’s and Spencer were close behind, at more than 96% efficiency. B&M, Sainsbury’s Waitrose and Co-op all came in at 94% or better. Lidl was the worst performer, failing to comply with the code nearly 15% of the time, followed by Morrisons and Iceland, each at around 12%.
Mark White, Groceries Code Adjudicator said he worries about numbers dipping further as challenges persist.
“Inflation has affected the entire groceries sector as witnessed by the sheer scale of requests from suppliers to increase prices,” White said. “I am concerned that the pressure has impaired relationships and created wider problems. My priority is to work with all the retailers to ensure they treat their suppliers fairly as they navigate the cost price process during this difficult time.”