14 day deadline at Tesco

T. M.: – A little more than a year ago Tesco brought its Central European businesses under one roof. What was the company’s objective with this restructuring?

– The reason for creating a single organisation for Central Europe was rather simple: we wanted to have a stronger unit that also works more simply. Tesco’s goal is to give shoppers more day after day. We believe that small steps can result in great changes, for instance just recently we announced a new, 14-day payment deadline for our small suppliers instead of the formerly used 30-day system.

T. M.: – How does the product director of Tesco Central Europe see the future?

– The most important thing is to work as a team together with our suppliers, so that shoppers can choose from a wide selection of quality products. Behind every product we sell we can see the local businesses and people we work with on a daily basis. In order to be able to serve our customers with quality products, we need to establish long-term relationships with suppliers, creating shared value.

T. M.: – In which fields does Tesco create better conditions for Hungarian suppliers?

– Local businesses that work with us can become stronger. With the creation of Tesco Europe they have a chance to have their products appear on the shelves of Tesco stores in other countries of Central Europe. For instance this season we sold 8 million kilograms of Hungarian watermelon in Hungary and another 8 million kilograms in our Central European stores. We follow the same practice with Hungarian wines as well.

T. M.: – What steps do you take to make cooperation with your suppliers more efficient in Central Europe?

– We make it easier for them to work with us. We can only create value for our customers if we have a good partnership with our suppliers. This only works if both parties use a sustainable business model and everyone profits from the cooperation. In the last few years we took several steps to make it easier for suppliers to work with Tesco, it is enough to mention our supplier newsletter, info line and conferences. We have recently introduced new payment deadlines for medium-sized and large enterprises: fresh product and grocery suppliers will get their money in 30 days, non-food dry good suppliers will be paid in 45 days and other non-food suppliers can work with us with a 60-day payment deadline.

T. M.: – How did Tesco modify the payment deadline for small businesses?

– As of 1 October 2016 the payment deadline will shorten from 30 days to 14 days. This deadline is valid for Central European suppliers with annual sales below GPB 25,000 (HUF 10.66 million). I must add that in the last 2 years we changed many things in our payment process, so in Central Europe we settle 84 percent of invoices earlier than the deadline.

T. M.: – How many suppliers are affected by the recent payment deadline changes in Central Europe and Hungary?

– The new, shorter deadlines apply for about 1,000 suppliers in Central Europe and 176 in Hungary.

T. M.: – Does Tesco measure – and if yes, how – supplier satisfaction and the efficiency of cooperation?

– Yes, we regularly measure how satisfied our suppliers are, and we try to react to their needs based on these surveys. We are proud to say that the results gradually keep improving. (x)