According to Reuters, the auditors for all three of Britain's biggest publicly-quoted retailers - Tesco, Sainsbury's and Morrisons - told investors in their most recent annual reports that their businesses faced material risks regarding the reporting of the supplier rebates. Those at the smaller online retailer Ocado did likewise.
In other words, ‘everyone knows’ or should have, that forward booking of supplier rebates is common practice, and usually causes no problems in good times, but…
Another, more obvious sign of trouble has been the dramatic falls in ROCE levels since the 2007 global financial crisis, with one notable exception: Walmart is still delivering a steady 18%+, operating in the same economic conditions.. (Clients and NamNews subscribers might care to check over our in-house updates for reminders going back at least five years…)
When new management, auditors and legal advisers re-assess past accounting process, it is probable that more issues will be added to the pile…
Meanwhile, to maintain the audit-momentum, the Independent reports that in the US, Los Angeles-based law firm Glancy Binkow & Goldberg has said it is investigating potential -class action- claims on behalf of Tesco’s American shareholders over possible violations of federal securities laws, focusing on “certain statements” issued by Tesco about its operations and financial performance.
The resulting falls in share price will impact suppliers and especially NAMs...
All of this will cost Tesco, and to a lesser extent, the other multiples much time and money, and major distraction, as the benefits of hindsight kick in ….
However, it should be borne in mind that whilst Tesco is on the ropes, it is not on the canvas…
Deep down, the crisis is but another business problem that needs managing, in order to focus on consolidating a 25% market share (see KamBlog)
This set-back will give Tesco and its supplier-partners a once-and-for-all opportunity of ‘cleaning up the future’, providing a basis for fair share dealing where willing compliance saves the cost of second-guessing, a place where business development becomes the focus of business reviews and appropriate reward for risk the basis for negotiation…
A true resetting of the supplier-retailer clock to a new time-zone in trade relationships.. why not scroll down, and keep scrolling, for ways and means?
In other words, ‘everyone knows’ or should have, that forward booking of supplier rebates is common practice, and usually causes no problems in good times, but…
Another, more obvious sign of trouble has been the dramatic falls in ROCE levels since the 2007 global financial crisis, with one notable exception: Walmart is still delivering a steady 18%+, operating in the same economic conditions.. (Clients and NamNews subscribers might care to check over our in-house updates for reminders going back at least five years…)
When new management, auditors and legal advisers re-assess past accounting process, it is probable that more issues will be added to the pile…
Meanwhile, to maintain the audit-momentum, the Independent reports that in the US, Los Angeles-based law firm Glancy Binkow & Goldberg has said it is investigating potential -class action- claims on behalf of Tesco’s American shareholders over possible violations of federal securities laws, focusing on “certain statements” issued by Tesco about its operations and financial performance.
The resulting falls in share price will impact suppliers and especially NAMs...
All of this will cost Tesco, and to a lesser extent, the other multiples much time and money, and major distraction, as the benefits of hindsight kick in ….
However, it should be borne in mind that whilst Tesco is on the ropes, it is not on the canvas…
Deep down, the crisis is but another business problem that needs managing, in order to focus on consolidating a 25% market share (see KamBlog)
This set-back will give Tesco and its supplier-partners a once-and-for-all opportunity of ‘cleaning up the future’, providing a basis for fair share dealing where willing compliance saves the cost of second-guessing, a place where business development becomes the focus of business reviews and appropriate reward for risk the basis for negotiation…
A true resetting of the supplier-retailer clock to a new time-zone in trade relationships.. why not scroll down, and keep scrolling, for ways and means?
No comments:
Post a Comment