Woolworths mulls plans to chop more suppliers

Woolworths is considering slashing supplier numbers by half to drive costs down and simplify its business structure.

By September 2002 - six months after chief executive Trevor Bish-Jones joined - the retailer had cut its supply base by more than 10 per cent, and now aims to slash it further.

Bish-Jones presented to investors last week at a store tour in Birmingham.

Broker Deutsche Bank noted: 'Management said that the supplier base has been cut from 1,100 to 900, and could fall to 500.'

Woolworths would not confirm the new figure, but a spokeswoman admitted that the retailer is looking at slimming down the number of suppliers. She said: 'If you have good relationships with fewer suppliers, you can expect better agreements with them. It is also more economically viable to deal with fewer suppliers.' She insisted Woolworths' 50,000-strong product range would not be reduced.

However, some observers questioned the wisdom of pushing supplier numbers as low as 500. Retail Knowledge Bank research director Robert Clark said: 'It does seem a small number, given the thousands of products in the range.

It needs to be carefully orchestrated. Woolworths has to ensure that it doesn't throw the baby out with the bathwater.'

Woolworths is also to halve its operations board, from 14 members to seven, to speed up decision-making.