Simon Evans: If Tesco bullies the little man, it's time to shop elsewhere

Giant's decision to pay later could destroy its suppliers

Friends used to joke that I was always in Tesco when they rang me on my mobile phone. They were right. I used to spend a fortune in there. It was convenient, relatively cheap, with a range of goods on offer that rivals could only dream of.

When Tesco opened a giant new store in my home town near Cardiff, I was delighted, even if the monolithic structure lit up the night sky like something out of Close Encounters.

But last week's decision by Sir Terry Leahy's group forcing suppliers to wait almost two months to be paid – previously it was just one – has foisted a change on my thinking.

I've decided to take my business elsewhere, because, in my humble opinion, Tesco's actions are deliberately provocative and unnecessarily aggressive. It's doing it because it can.

Suppliers, typically small or medium enterprises, are already facing the squeeze from their banks, with overdraft costs exorbitant and loan finance practically non-existent. With cash being king, I certainly don't think it's alarmist to suggest that many of Tesco's suppliers will go to the wall because of its action.

Suppliers have privately complained about Tesco's strong-arm tactics for a while but have shied away from publicly rebuking their biggest customer for fear of being axed.

It's difficult for the man on the street to get his head around the supply decision, given that Tesco pocketed profits of nearly £90 a second in the first half of the year. And it just feels to me that the concentration of power in Sir Terry's hands is too great.

We, the British public, created the Tesco beast by flocking to its stores in huge numbers. Perhaps we now need to tame it by shopping elsewhere.

If Tesco's Knight of the Realm is having a tough time with his PR, spare a thought for Marks & Spencer's Sir Stuart Rose. This week he faces one of the biggest tests of his tenure at the retail group when he delivers the company's half-year numbers. He has, so far, refused to countenance the prospect of slashing its sacred dividend, but weak numbers will heap pressure on him to cave in. The prospect of Sir Stuart having to step aside isn't as fanciful as it once may have been.

Discount retailer Primark will also issue figures in the coming week. Judging by the masses grappling to get into the store last week its numbers are unlikely to be anything but good.

Woolworths doesn't have any figures for the market, but don't bet against another piece of bad news emerging. Last week it was revealed that Burdale, which lent Woolies £300m earlier in the year, had brought in restructuring experts Deloitte to look at ways to inject life into a company that looks odds on to fold in the next few months. How Steve Johnson, the chief executive who started in September, must rue his decision to join.

Talk in the retail arena last week was dominated by the opening of the Westfield mall in White City – destined to be a white elephant if some forecasts are to be believed. Walking past it in the driving snow last Tuesday it looked more building site than Europe's biggest shopping centre.

I'm sure that West Londoners will be piling into the giant Westfield car parks today. The question is whether they'll be spending or just looking.

Sadly, I think it'll be the latter.

MoD's contract bidders fall victim to the law of unintended consequences

Do we trust the Government to play fair? That's the question that must be on the lips of the Lockheed Martin-led consortium vying for the Ministry of Defence's (MoD) £5bn search-and-rescue helicopters contract.

One of the unintended side-effects of Gordon Brown's decision to part-nationalise the banks is that many of the bidders gunning for government contracts are essentially owned by Whitehall. In the £5bn search-and-rescue contract, defence group Thales and helicopter firm CHC have teamed up with Royal Bank of Scotland.

Advisers to the rival consortium have pondered whether the MoD can really not select a group that includes a key part of the Government's own financial arm in RBS.

By the time the 30-year contract starts in 2012, it's quite possible the Government will have sold on what it invests in RBS. And the truth is that a defence industry source says "we just have a bit of a giggle about this", while a member of the rival consortium acknowledges that it shouldn't make a difference to the preferred bidder selection next June.

But that rival does point out how bad the perception could be if the RBS group wins. These banks get involved in so many major government contracts, including health and education, that surely one losing team will complain, formally, of foul play over the next few years.

We only have to look at the "yachtgate" affair to see the importance of perception. The coverage seems to have focused as much on the idea of politically influential people drinking champagne with a Russian oligarch as on what actually happened.

A bad taste has been left, yet so much of the affair seems to have amounted to unproven accusation and counter-accusation.

The Government might well have to beef up its contract selection panels with independent – and probably expensive – advisers, if it is to avoid any accusation of handing contracts to its banking subsidiaries. This is a terrible shame and very probably a waste of money, but it is essential.

Hohn hedges while activists fail to shake up the FTSE100

With one third of FTSE100 firms now trading at a discount to their book value – the stock market values these companies at less than their basic liquidation values – the markets should be ripe for activist investors to shake things up.

But they are not. Activists are having a bad time.

Last Friday, Chris Hohn, pictured above, the feted hedge-fund manager whose intervention sparked the break-up of ABN Amro last year, was forced to bow out of his battle with Japanese company J-Power, at an estimated cost of more than £80m.

Meanwhile Knight Vinke, the Monaco-based hedge fund, still has a large dollop of egg on its face on the back of its horribly mistimed attempt to shake up HSBC, perhaps the best-performing UK bank in the credit-crunch.

As we revealed last month, Glenn Cooper, the activist fund manager responsible for bringing Manchester United to market in the 1990s, who also took on Vodafone's management last year, is looking to raise £500m for a new fund to challenge some of the UK's biggest underperforming stocks.

I hope that Mr Cooper is successful in raising the cash to tackle the FTSE's lumbering giants. Activism is alive and well among smaller companies. It would be nice to see the management of some of the UK's biggest firms having to answer a few awkward questions soon.

News
people
News
people And here is why...
News
peopleStella McCartney apologises over controversial Instagram picture
Life and Style
Laid bare: the Good2Go app ensures people have a chance to make their intentions clear about having sex
techCould Good2Go end disputes about sexual consent - without being a passion-killer?
PROMOTED VIDEO
Arts and Entertainment
Richard Burr remains the baker to beat on the Great British Bake Off
tvRichard remains the baker to beat as Chetna begins to flake
News
i100
Sport
footballArsenal 4 Galatasaray 1: Wenger celebrates 18th anniversary in style
Arts and Entertainment
Amazon has added a cautionary warning to Tom and Jerry cartoons on its streaming service
tv
News
people
News
The village was originally named Llansanffraid-ym-Mechain after the Celtic female Saint Brigit, but the name was changed 150 years ago to Llansantffraid – a decision which suggests the incorrect gender of the saint
newsWelsh town changes its name, but can you spot the difference?
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Kristen Scott Thomas in Electra at the Old Vic
theatreReview: Kristin Scott Thomas is magnificent in a five-star performance of ‘Electra’
News
Destructive discourse: Jewish boys look at anti-Semitic graffiti sprayed on to the walls of the synagogue in March 2006, near Tel Aviv
peopleAt the start of Yom Kippur and with anti-Semitism flourishing, one Jew can no longer ignore his identity
Life and Style
Couples who boast about their relationship have been condemned as the most annoying Facebook users
tech
Arts and Entertainment
Hayley Williams performs with Paramore in New York
musicParamore singer says 'Steal Your Girl' is itself stolen from a New Found Glory hit
News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Trust Accountant - Kent

NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

Law Costs

Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

Day In a Page

Italian couples fake UK divorce scam on an ‘industrial scale’

Welcome to Maidenhead, the divorce capital of... Italy

A look at the the legal tourists who exploited our liberal dissolution rules
Time to stop running: At the start of Yom Kippur and with anti-Semitism flourishing, one Jew can no longer ignore his identity

Time to stop running

At the start of Yom Kippur and with anti-Semitism flourishing, one Jew can no longer ignore his identity
Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

The vintage series has often been criticised for racial stereotyping
An app for the amorous: Could Good2Go end disputes about sexual consent - without being a passion-killer?

An app for the amorous

Could Good2Go end disputes about sexual consent - without being a passion-killer?
Llansanffraid is now Llansantffraid. Welsh town changes its name, but can you spot the difference?

Llansanffraid is now Llansantffraid

Welsh town changes its name, but can you spot the difference?
Charlotte Riley: At the peak of her powers

Charlotte Riley: At the peak of her powers

After a few early missteps with Chekhov, her acting career has taken her to Hollywood. Next up is a role in the BBC’s gangster drama ‘Peaky Blinders’
She's having a laugh: Britain's female comedians have never had it so good

She's having a laugh

Britain's female comedians have never had it so good, says stand-up Natalie Haynes
Sistine Chapel to ‘sing’ with new LED lights designed to bring Michelangelo’s masterpiece out of the shadows

Let there be light

Sistine Chapel to ‘sing’ with new LEDs designed to bring Michelangelo’s masterpiece out of the shadows
Great British Bake Off, semi-final, review: Richard remains the baker to beat

Tensions rise in Bake Off's pastry week

Richard remains the baker to beat as Chetna begins to flake
Paris Fashion Week, spring/summer 2015: Time travel fashion at Louis Vuitton in Paris

A look to the future

It's time travel fashion at Louis Vuitton in Paris
The 10 best bedspreads

The 10 best bedspreads

Before you up the tog count on your duvet, add an extra layer and a room-changing piece to your bed this autumn
Arsenal vs Galatasaray: Five things we learnt from the Emirates

Arsenal vs Galatasaray

Five things we learnt from the Gunners' Champions League victory at the Emirates
Stuart Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

This deal gives England a head-start to prepare for 2019 World Cup, says Chris Hewett
Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

The children orphaned by Ebola...

... then rejected by surviving relatives over fear of infection
Pride: Are censors pandering to homophobia?

Are censors pandering to homophobia?

US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence