Dobbies will look for new terms

Profits warning prompts renegotiation with suppliers

Dobbies financial director Sharon Brown has said the garden centre chain will ask some suppliers for improved terms for 2008. Following a Dobbies “profits warning” last week, the garden centre group, taken over by Tesco this month, said: “Our buyers aim to renegotiate in the normal course of events. Renegotiating is normal but we’ve not sent a letter to suppliers asking for one per cent or we will de-list you.” Brown added: “It is standard to ask for improved terms. If a supplier has doubled volumes it’s quite right we go back to them for better terms. Our sales growth is 20-30 per cent so we’re looking to renegotiate with suppliers — that’s a common-sense perspective. It’s more about our own growth.” Brown added that Tesco would not give Dobbies advice in negotiations. “It’s more about [Tesco] asking us about certain areas such as sourcing plants and food products. There’s no revolutionary change. It’s more evolution than revolution.” To the warning that pre-tax profits for the year to 31 October may be £1m below expectations at £5.2m, she added that year-to-date plants sales were down by five per cent but the group expected to remain 0.5 per cent up overall. Chief executive James Barnes told HW: “Our plant sales are up this year. We’re looking to tweak our buying practice in terms of reserving more stock and if we can negotiate better prices on the back of that then great.”

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