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Retail chains "bullying" suppliers

02/11/2006

Major high street retailers are "bullying" suppliers into accepting lower profit margins so they can make more money themselves, an industry expert is to claim today.

Nick Goulding, chief executive of the Forum of Private Business (FPB), will tell a retail conference today that small suppliers of large retail chains are being forced to accept poorer deals for their goods because they run the risk of being dropped without ceremony if they object.

The FPB has named 26 stores which it accuses of being guilty of this practice, including Matalan, Argos, BHS, Selfridges and Homebase.

"The fear of being blackballed by a customer with the buying power of Matalan is a very strong incentive indeed not to create a stink," Mr Goulding said.

"Big name retailers are abusing their purchasing power at the expense of their suppliers.

"It is becoming all too common for changes in payment terms to be introduced by retailers looking to increase their profit margins. Suppliers are left with little option but to accept the changes for fear of losing orders if they don't."

Mr Goulding suggested that large-scale businesses look at their own practices to make efficiency savings in order to boost their profits, rather than making suppliers foot the bill.

The FPB represents 25,000 small- and medium-sized enterprises.

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