Visible Commercial Clout

I have many times over the last couple of years pointed out that large companies can afford to dictate their own terms and that some of them do, and that attempts by suppliers to resist or override those terms tends to result in those suppliers being 'delisted' or otherwise penalised.

Over the last month or so, I have twice seen large company commercial clout in action - and it was a graphic illustration of the possible (and in one case very likely!) 'knock-on' effect of trying to impose terms on a very powerful customer.

E. LeClerc is a huge company that owns supermarkets and hypermarkets all over France. They are hugely popular, and sell practically everything - including, in some locations, holidays - so I was surprised, when I went shopping at our local branch of LeClerc recently, to find so very few of the major brands of butter on offer. Or at least, I was surprised until I saw the notice on the cooler cabinet that explained that some brands - unnamed - were not available because they did not comply with LeClerc's pricing policy.

I am very fond of nice butter, but in France most butter is very nice; I was quite happy to buy one of the brands on offer rather than the brand I would normally buy - and so, I suspect, were hundreds of thousands of other people all over France, a percentage of whom will stick with the new brand rather than going back to the old one.

The butter suppliers' dispute with LeClerc over pricing may well be resolved in due course - just as Intermarché recently resolved its dispute over the price of bread with the Harrys Group - but loss of 'brand loyalty' means that damage to suppliers will amount to far more than a short-term financial hiccup.