Holland and Barrett has informed suppliers it will be processing cost reductions of at least 5%: with or without their agreement.
CEO Peter Aldis sent an initial letter in January demanding these reductions which angered many of the retailer‘s suppliers. The cuts were suggested so that suppliers would “contribute proportionally to the growth of the business”.
Holland and Barrett sent a second letter to supplier who were yet to respond this week, stating that it would view the lack of response as an acceptance of its requests.
Conversely, Emma Cockerill, Head of Sales and Procurement said that the chain was “delighted” by the response of a large number of its suppliers that had been “very proactive in developing plans that drive their businesses in conjunction with our expansion, both in the UK and overseas. However, despite the request in January to contact us, there is a small group of supplier who have decided not to respond.”
“Given that we have had hundreds of negotiations with our suppliers to reach mutually satisfactory conclusions, we are unable to allow this small group to purely ignore the letter. We therefore have to conclude that a non-response means acceptance of the changes we are proposing.”
Holland and Barrett will be changing the cost prices on 1 June.