Tesco boss Dave Lewis insisted the grocer has “drawn a line under the past” but admitted work is needed to repair supplier relationships.
The supermarket giant was today found to have “seriously breached” the Groceries Supply Code of Practice by delaying payments to its suppliers.
Groceries Code Adjudicator (GCA) Christine Tacon ruled that the retailer “acted unreasonably” by delaying the payments. Tacon admitted she was shocked at how “widespread” the practice was, particularly ahead of “key reporting periods” in order to achieve margin targets.
“We accept that was a practice that was in our business, we have gone about changing the business, we’ve drawn a line under the past at Tesco and we have a completely different business.”
Dave Lewis, Tesco
The GCA report came after Tesco carried out its own investigation into the practice and shared its findings with the grocery watchdog a year ago.
Lewis said: “We did our own investigation, we shared the findings of that investigation fully and openly in January last year with the GCA and we set about changing our business.
“The critical thing for me is we accept that was a practice that was in our business, we have gone about changing the business, we’ve drawn a line under the past at Tesco and we have a completely different business.
“Even in the report, it says the overwhelming majority of suppliers recognise the change that [chief product office] Jason [Tarry] and the team have been leading.”
But despite implementing 14 supplier-related initiatives since 2014, including reducing the number of ways in which it calculates commercial income and setting up a supplier helpline, Lewis admitted Tesco remains “on a journey” to building better relationships with suppliers.
When asked about the small of number of suppliers identified within the GCA report as still being unhappy with their relationship with Tesco, Lewis added: “We look at the overwhelming majority of suppliers that say the business has changed, but it’s one of the reasons I say we are on a journey.
“We are constantly re-evaluating how it is we engage with more than 3,000 suppliers. Are we sitting here saying we’ve got it perfect with every one of them? No we’re not.
“Are we saying that we have made a material step forward with the vast majority and they are noticing it? Yes, that’s what we’re saying.
“We have asked the GCA if they are able to share with us any supplier who was uncomfortable or unhappy so that we can address it.”
Tesco remains under investigation from the Serious Fraud Office over the £263m accounting scandal, but Lewis said he had “no indication” as to when it will report its findings.
The grocer has the threat of potential litigation from shareholders hanging over its head after its share price plummeted following the revelation and Lewis admitted today that he was “concerned.” However, he insisted the retailer had “absolutely not” made financial provisions in preparation for any legal action that may arise.