Tesco has written to Tesco UK, Republic of Ireland and Booker suppliers to notify them of its intent to introduce a fulfillment fee.
A fulfilment fee represents the sum of all product expenses like receiving, storing and distributing.
The fee will be applied on all products sold via the supermarket’s websites (Tesco.com and Tesco.ie) and app, and for its wholesale business, Booker, the fee will be applied on all orders fulfilled on behalf of retail and catering customers.
Products sold in Tesco stores or through Booker’s cash and carry business will not be included.
How much suppliers will be charged per product has not yet been confirmed. The letters sent are the start of conversations on the topic, with no deadline set for engagement.
The retailer’s smallest suppliers however, are not in scope for the fee. Tesco said its small suppliers are those with a turnover of under £250,000.
“As we respond to changing shopping habits and our fulfilment costs continue to grow, we are talking to our suppliers about how we can work together to create a more balanced approach and ensure we can continue to invest in our customers,” a Tesco spokesperson said.
“Over recent years, the way we serve our customers has grown in both capacity and complexity.
“Our customers expect us to serve them wherever, whenever and however they want to shop.”
Supply news
In other retailer news, the Food Standards Agency’s (FSA’s) National Food Crime Unit (NFCU) is investigating the supply of meat wrongly labelled as British to UK supermarket Booths back in 2021.
The pre-sliced meat and deli products actually came from South America and Europe.
The NFCU is considering this a matter of food fraud by the supplier.
Booths, which is working with the NFCU in its investigation, has said it is “categorically not under investigation” itself.
