business news in context, analysis with attitude

In a memo to vendors provided to MNB by one of those suppliers, Ahold Delhaize has 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."

That help, the memo says, includes "securing necessary product levels," which means "increasing allocations, fine-tuning assortments in conjunction with our category teams, and being both creative and flexible in how we think about rapidly bolstering our supply chain networks will be foundational to our collective response."  And, Ahold Delhaize says, it needs trade rates "to remain whole for the year. We understand promotional activity will see some potential adjustments in the coming weeks, while supply replenishment remains the priority. We do expect that when the situation stabilizes, commercial elements will be made whole for each Ahold Delhaize USA brand."

Here's the kicker from the memo:  " 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."

The memo was signed by Kevin Holt, CEO of Ahold Delhaize USA, as well as by the presidents of all the company's US banners.

The vendor who provided this memo to MNB reacted this way:   "This struck me as very cold and goes to your point of some advertisers on TV being tone deaf to what is going on.  In essence, get ready for Ahold Delhaize to billback suppliers for their COVID-19 costs.  I can hear the statement:  'Our store sales were up.  We had to hire more associates.  You benefitted.  Here is your portion of that bill'."

This vendor compared the Ahold Delhaize approach to that of Albertsons, which last week sent a memo to suppliers saying:

"As we look back on the last few weeks – a period of unprecedented business, it is remarkable how much we have accomplished. On behalf of the entire leadership team, we want to thank you for what you are doing to support our stores and customers. Providing our communities with the products they are looking for is central to our mission.

"We appreciate you and your efforts to work together to get through these challenging times. To further express our appreciation, we are pleased to provide you with a $5 off your purchase of $50 or more and a FREE Starbucks Tall Drip Coffee."

The vendor wrote MNB:  "Talk about someone that gets it and someone that doesn’t.  Suppliers have busted their backs to get products to stores just like retailers have to get those products to consumers.  A very nice gesture."

KC's View:

What this vendor is suggesting to MNB, in essence, is that while Albertsons is offering a nice gesture, Ahold Delhaize can be seen as using another gesture - a middle finger - to suppliers.

If this is the broad perception, and I can see how it might be, memories will be long.  And maybe some companies will be seen as not learning from the crisis.