Yesterday we reported that in a memo to vendors provided to MNB by one of those suppliers, Ahold Delhaize thanked the manufacturers for "continued support" meeting the challenges of the pandemic, and told the companies that it needs their help "in making sure we deliver on our commitments." But it also told the vendors that "pandemic-related costs will be evaluated. As we continue to evaluate the impacts of this pandemic on our business, we will review ancillary costs we are incurring and revisit with each supplier as needed at a later date."
Suppliers with whom MNB spoke saw the memo as serving them notice that Ahold Delhaize intends to charge them for as many of the costs incurred during the pandemic as it could. And they were not pleased.
Several suppliers then reached out to share a similar letter they received from SpartanNash, which reads as follows:
Dear Vendor Partner,
With the escalation of the coronavirus (COVID-19) pandemic, SpartanNash has unfortunately experienced a significant increase in cases whereby our inbound purchase orders have had items reduced or not filled due to the unprecedent (sp) high demand and manufacturers struggling to keep pace. In addition to “fill rate” issues this is causing with our valued customers, we are also seeing multiple trucks -- that SpartanNash hires for customer pick up -- loaded light by our vendors as a result.
In light of this unfortunate situation, we have made the decision that beginning with the ship date of March 16, 2020 and until the COVID-19’s impact on deliveries is rectified, SpartanNash will deduct for freight dollars owed based on either of the following:
• Difference between ordered versus shipped quantity.
• Difference between average quantity/order (truck) prior to COVID-19 versus shipped quantity.
• Applicable to vendors who offer freight allowance with “delivered” pricing.
• Applicable to vendors who offer FOB versus delivered pricing.
We appreciate your support and understanding that SpartanNash cannot be burdened with a higher landed cost of goods due to product availability issues and we are not able to order excess inventory (not needed) to achieve a best truckload bracket price.
The letter was signed by David Frizzle, SVP SpartanNash Transportation, and Steve Bidgood, Regional VP - Transportation.
One of the vendors who supplied the letter to MNB wrote:
Amazing how some companies can be isn’t it??!! Check out this letter received today from SpartanNash…talk about the middle finger!
They had already told buyers not to adjust their POs for products that weren’t available…guess I should have seen this coming…
And another wrote:
I know you have published a few letters about retailers that have been working with manufacturers during these crazy times and I thought you might find the attached letter from SpartanNash intriguing. Not only do they want manufacturers to pay for shortages on freight this letter was sent on 4/9 (Good Friday) but they are also back dating these fines for orders starting on 3/16.
- KC's View:
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Seems to me that companies are going to be separated into two groups - those that were partners, and those that were not.
And it seems to me that going forward, most companies will be better served by being in the former group. It is hard enough to deal with actual competition, but when you also are fighting against the entities that you need to be successful, it has to run into a time and energy suck. Which ends up sucking for everyone.
