Supermarket price negotiations – they work both ways
Have you heard the saying “Some days you are the statue and other days you are the pigeon”?
It’s a perfect little bon mot; it has a philosophical air about it, but it’s basically still toilet humour.
I was reminded of this quote recently when I found myself involved in two bouts of price negotiations. Curiously, we found ourselves on a different side of the table on either occasion.
The week began with a price negotiation with a very large supermarket over one of the products that we supply to them. I say “negotiation”; strictly speaking we had already agreed the price once, they wanted it lower still. In fact, I don’t know why I’m calling it a negotiation at all – the buyer demanded a 21% price reduction if we wanted to keep the business and that was that. They were offered a cheaper price by another supplier and we had to beat it to keep our order. This was done at the very last minute so we had no option but to accept the lower price in order to recover what we had already invested. I say we had no option. We did, of course, but I can be pig-headed sometimes when it comes to losing business and in my book a pyrrhic victory is better than defeat.
You might say this is shoddy behaviour from the supermarket, but it isn’t at all uncommon. I’m commenting on the situation rather than complaining about it – I know the rules of the game perfectly well. This is why I haven’t told you the name of the supermarket – I have even removed the snide reference about them from the last paragraph without being instructed to by the editor.
Later in that same week, the boot was on our foot. We were purchasing a potato grader and were considering machines from two local manufacturers. For those of you who know about potato equipment, these are the one based in Cambridgeshire and the one based in Lincolnshire. For those of you who don’t know about potato machinery, we were trying to choose between a red one and a light green one.
“You don’t need a corporate responsibility policy when your name is on the gate.”
Matthew Naylor
You have no idea how difficult we found it to make our decision; it made me almost sympathetic to the supermarket buyer. There was nothing to choose between the two machines in terms of specification, they were more or less identical. The salesmen were both engineers by trade and excellent at their job. Both manufacturers are family-run businesses that employ local staff. They both even offered to paint it whatever colour we wanted.
Without any pressure from us, both firms fought hard to provide us with the right machine at the most competitive price. They both deserved an order, but we had to make a decision one way or the other and price had to become a consideration.
I suppose it is healthy that we have fantastic British manufacturers competing against one another like this, it drives product innovation and keeps prices fair. I can hardly complain when supermarkets drive hard bargains with me, can I?
The only difference is that farmers have to stand by the consequences of their choices. If you are committed to one career in the same location for your whole life then you try to be fair and honourable with your decisions. You don’t chase a quick buck. You certainly don’t need a corporate responsibility policy when you have your own name on the gate. I have never had a bad deal with a fellow farmer.
The supermarket buyer will have moved on in six months. They will be giving someone a hard time over cotton buds. We will still be standing stoically in the same place, just like that statue.
Matthew Naylor farms 162ha (400 acres) of Lincolnshire silt in partnership with his father, Nev. Cropping includes potatoes, vegetables, cut flowers and flowering bulbs. Matthew is a Nuffield scholar.
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