The retailer has informed all its suppliers in home furnishings, clothing and food that it requires a 0.5 per cent discount on the cost price from next month to help to pay for the latest marketing campaign as well as improvements to its stores and its internet site.This is not the first such call for additional discounts. The Times says M&S demanded cuts in September 2004 and April 2005. The article wasn't clear if those discounts are cumulative, but it appeared so.
Meanwhile, “direct” suppliers that provide goods straight from factories mainly in the Far East — about a quarter of all M&S’s suppliers — have been asked for a 5.5 per cent discount.
M&S’s suppliers gave a 3.75 per cent discount in September 2004 and another 2.5 per cent from last April in order to deliver £140 million in savings as part of the plans of Stuart Rose, chief executive, for a turnaround of the business.
A spokeswoman for M&S said: “We have reviewed our terms with all of our suppliers. We are continuing to invest heavily in marketing and on our store remodels and online programme.
“As a result volumes are increasing and we are getting quicker turnaround on product, which is benefiting suppliers with better cashflow and higher revenues through their business with M&S.” Suppliers confirmed that M&S’s trading had held up since the new year.
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