Working with suppliers - Matalan applies the squeeze

A good example to use in AQA AS Unit 2 (working with suppliers). Discount retailer Matalan has made itself unpopular with a group of small business suppliers by imposing another price cut…

This article in the Telegraph is a good example to use when describing how customers and suppliers can come into conflict.

Matalan’s strategy is clear:

- Consolidate (i.e. reduce) the number of suppliers to drive purchasing efficiencies
- Look to use its bargaining power to cut supplier prices to allow it to maintain gross profit margin and still offer customers discounted goods.

You can understand how smaller suppliers (many of whom might be over-reliant on sales to Matalan) are upset by this. But what can they do?