Spar UK has warned suppliers that it must take the hit associated with increased costs from the Brexit transition period ending to avoid price rises for consumers.
As Boris Johnson warned that the UK is preparing for a no-deal Brexit on January 1, a letter seen by the Grocer, the retailer has warned it will not accept price increases from its suppliers.
In the letter from trading director Chris Lewis explained: “In the event of a hard Brexit, we want to make our position clear to you: Spar will not accept any cost price increases without a robust valid justification to support it,” he warned.
“For uncertain cost factors such as tariffs and currency, your business will have built stocks to provide a consistent and uninterrupted supply for well into 2021.”
“While we do understand this will depend on ingredients and product life, we do fully expect your business to manage this proactively with the aim of protecting Spar’s ability to maintain great service and competitive costs to our retail members and consumers alike.”
The letter urges businesses to make suitable preparations for a hard Brexit, which includes forward purchasing of packaging and raw materials/ingredients, stock building of finished goods, currency hedges and supply chain scenario planning”.
Firms have been advised to respond by the end of next week with details of what disruption and contingency plans each business has in place.
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