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There is no doubt that the continuation of the Covid-19 lockdown is placing significant and never before seen pressures on the garden retail supply chain, however the Garden Industry Manufacturer’s Association (GIMA) is issuing a call to action to retailers to keep cash flow active and that it continues to reach suppliers.
Pre-season deliveries in January and February would traditionally see payments reach suppliers in April and May, but in a world where Coronavirus is creating an unprecedented landscape, receipt of these payments are not necessarily a given as retailers tighten their belts. A troubling concept already, but as spring represents a time when cash is historically already limited for most suppliers, the issue is significantly compounded.
GIMA Director, Vicky Nuttall, said: “The continued closure of garden retailers understandably leads to a need to control expenditure, however, halting the flow of cash through the supply chain is not the answer. There is no question that for some suppliers, lack of payment could lead to their untimely demise; something that will be felt across an industry that often sells itself as one that supports one another. I urge retailers, on behalf of our members, to support your suppliers as you would your own staff. It’s so important, now more than ever, to speak to your supply customers and not leave them in the dark. Please don’t dictate payment terms and definitely don’t take rebates off invoices that have not been taken. Sadly, we’re hearing that some retailers are starting to employ bullying tactics which we deem to be totally unacceptable, and we will not hesitate to publicly call out these retailers should these tactics continue. Getting through this difficult time will only be possible if we work together, and thankfully not all retailers are responding negatively. Many are already stepping up to the mark and are actively communicating with their supply partners, and I hope this communication continues to build over the coming weeks - after all, forewarned is forearmed.”
Pressures of home delivery & Job Retention Scheme
The switch to home delivery, coupled with significant uptake of the Job Retention Scheme, is also placing additional pressure. The entrepreneurial spirit of some retailers that have been quick to adapt to consumer demand should be congratulated, but it is also important to be aware that many suppliers are now operating a skeleton staff having furloughed much of their workforce. As a result, suppliers may be unable to respond to stock requests as quickly as they normally would, and contingencies need to be put into place to incorporate this longer lead time.
On the flip side, retailers should not berate suppliers who have reached out to the home delivery and internet channels. Vicky added: “Suppliers do not have the benefit of business rates holidays or cash grants. At a time of crisis, it is necessary to take advantage of any opportunities that ensure survival, and presently online sales are the biggest opportunity of all for the entire supply chain. For most suppliers the income generated from their online customers will help, but it certainly won’t fill the massive void left from the loss of their garden centre trade. This isn’t about replacing retailers, it’s about adapting and ensuring a healthy supply chain will emerge from this gloom.”
GIMA - here for its members
Since the outbreak of Covid-19, GIMA has been working tirelessly behind the scenes to offer a range of services and support tools for its members.
Initially, the trade association kept its members informed about the financial support available, including the Job Retention Scheme and wider government initiatives. The team also maintain a direct dialogue with the Confederation of British Industry, ensuring member concerns are being heard at the highest level. Meanwhile, daily cross dialogue with other trade bodies such as the HTA, LOFA and BHETA is maintained to share information and to create a cross-sector support network.
GIMA has also made sure that industry specific issues such as cash flow seasonality, pressure from national retailers over payment terms, ornamental horticulture and increased demurrage and detention costs at the ports, are also recognised.
Finally, the importance of providing a community for its members has never been so inherently necessary. This community of GIMA members is enabling a safe place to share best practice and ideas on how to handle the current crisis.
Find out more about GIMA and its many benefits for members by visiting www.gima.org.uk or call 01959 564947.