Global grocery retailer, Tesco, hit the news today after an investigation found that they knowingly delayed payments to suppliers.
According to The Telegraph,
The Groceries Code Adjudicator has accused Tesco of falsely inflating its profits by delaying or deducting millions of pounds from its suppliers while also billing them twice for sums owed.
Amazing what you can get away with when you’re the third largest retailer in the world measured by profits and second-largest retailer in the world measured by revenues.
During the investigation, The Guardian reports that evidence was uncovered that Tesco:
took more than two years to pay back a “multi-million pound” sum owed to a supplier as a result of price changes being incorrectly applied over a long period
It took about two years to repay a supplier who was owed a multi-million pound sum for products it never supplied, due to data input errors
A supplier waited for more than a year for a £2m repayment due because of duplicate invoicing
Tesco required one supplier to pay more than £1m to maintain its target profit margin on the account
A seven-figure sum was unilaterally deducted from a supplier in order to meet a margin target
Tesco deliberately delayed payments at key financial reporting periods to bolster its bottom line, even if suppliers requested payments.
Clearly, this type of behaviour is akin to the playground bully throwing his weight around and stealing tuck money from the smaller kids. Luckily, this particular bully’s been caught red handed: the accounting scandal at the retail giant is also the subject of an investigation by the Serious Fraud Office.
Here’s something we can all do to show Tesco just what we think of them. This Saturday afternoon, when the stores are all busy, go to your local store. Take a large trolley, fill it with small items off the shelves (you get more small items in a trolley). Queue up at a till: not self service; no point in doing all the work yourself for free! Ask for plastic bags when you get served, and take your time packing everything. When the cashier tells you how much you owe, demand to defer payment until Friday to make your bank balance look better than it is. Demand to see the cashier’s supervisor, and make the same argument. Demand to see the manager, make the same argument. Finally, leave the store without the shopping. For YouTube laughs, have a friend film the whole thing!
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