Dangerous game
The Financial Times has reported today that Kesa, the owner of electrical retailer Comet in the UK, is to charge companies for the privilege of having their products displayed on the Comet shop floor.
Apparently Comet's commercial director Bob Darke wrote to suppliers in December to tell them the charges would commence in the New Year. On top of the listing fee, he also demanded a two percent discount on invoices.
Typical listing fees quoted in the FT story include over five grand for a toaster and £15k for a washing machine. It seems Comet is benevolently not charging listing fees on all items.
While it's not unprecedented for retailers to impose tougher terms of business on suppliers in a downturn, suppliers questioned by the FT seemed to reckon this was on the draconian side.
One anonymous supplier said: "[the] size and the scale of what Comet is demanding is unusual. It is outrageous."
Comet is playing a dangerous game here. While its main competitor, DSGi, has a reputation for such charges, it's also going through a major corporate transformation. If Comet's terms of business now compare unfavourably to DSGi's it could lose market share and find itself poorly positioned once the economy starts to pick up again.
