Threat to toy suppliers raises concern over returns at Asda

An Asda buyer has sent a bullying e-mail to the supermarket's toy suppliers threatening to terminate orders unless stocks are cleared and supply terms improved.

An Asda buyer has sent a bullying e-mail to the supermarket's toy suppliers threatening to terminate orders unless stocks are cleared and supply terms improved.

The heavy-handed memo adds to suggestions that Wal-Mart is struggling to achieve the returns hoped for from Asda when it paid £6.7bn for the company last year. It comes as Asda is launching its first Asda Wal-Mart store, which opens in Bristol on Monday.

The memo states: "If we are to move the toy category forward next year we need to address primarily major stock problems which have been outstanding now for some time." It says the stock issue "needs to be resolved as a matter of urgency, and if we are unable to resolve [it] we will struggle to justify having toys in Asda stores next year."

The memo, which does not name the manufacturers involved, specifies demands for each supplier. It demands that manufacturers take back unsold toys from Asda's stores, as well as stock on delivery. Normally a shop would be responsible for over-orders and would have to clear stock by cutting prices.

Finally, the memo states that "in order to support markdowns", a flat charge of 22 per cent will be applied to all year 2000 projected turnover. In one supplier's case the demand was for a payment of £176,000.

Asda expressed grave concern over the leaked memo yesterday. "This is absolutely not indicative of the way we do business at Asda. We are in the process of contacting the individual concerned and are taking this extremely seriously." It is thought the memo will become a disciplinary matter.