You are working as a Food Buyer for Sainsbury’s. Just over three weeks ago, the factory equipment of one of the largest suppliers in your product area went down for two weeks. They are a long-term supplier to Sainsbury’s and supply a quarter of the products in your range; consequentially, the factory closure resulted in massive sales and profit loss for your category.
You arranged to meet with the supplier as soon as production began again to discuss recuperation of your lost profits. The supplier did not sign the Sainsbury’s T&C’s around loss compensation, despite this, you calculate a large compensation figure based on a variety of factors: loss of profit; increased labour to deal with the in-store problem of empty shelves; impact to stores and customers. You advised the supplier of this compensation figure and explained your rationale. However, the supplier’s calculations conflict with yours and they only agree to pay 10% of the compensation figure you specified. After a month of further negotiations the supplier consented to pay your compensation in full if the following terms are met: an increase in the distribution of their products within convenience stores, launch a new range they have brought to the market, increase stocking points and run extra promotions in the second half of the year.
You carried out a range review using customer data three months ago. The data showed that the supplier had too high a share in the category which led you to reduce their overall SKU counts and distributions.