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Comet now charging just to display products

by Scott Bicheno on 27 January 2009, 14:19

Tags: PC World (LON:DXNS), Comet

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Dangerous game

The Financial Times has reported today that Kesa, the owner of electrical retailer Comet in the UK, is to charge companies for the privilege of having their products displayed on the Comet shop floor.

Apparently Comet's commercial director Bob Darke wrote to suppliers in December to tell them the charges would commence in the New Year. On top of the listing fee, he also demanded a two percent discount on invoices.

Typical listing fees quoted in the FT story include over five grand for a toaster and £15k for a washing machine. It seems Comet is benevolently not charging listing fees on all items.

While it's not unprecedented for retailers to impose tougher terms of business on suppliers in a downturn, suppliers questioned by the FT seemed to reckon this was on the draconian side.

One anonymous supplier said: "[the] size and the scale of what Comet is demanding is unusual. It is outrageous."

Comet is playing a dangerous game here. While its main competitor, DSGi, has a reputation for such charges, it's also going through a major corporate transformation. If Comet's terms of business now compare unfavourably to DSGi's it could lose market share and find itself poorly positioned once the economy starts to pick up again.

 



HEXUS Forums :: 15 Comments

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I had assumed everyone already did this. I know it is common place in supermarkets and the US electrical retail industry. I would assume they already did this with some partner brands, such as Monster Cables going by the dominating display they have in Comet stores.
Funkstar
I would assume they already did this with some partner brands, such as Monster Cables going by the dominating display they have in Comet stores.
That's probably a reasonable assumption in terms of large, branded merchandising displays, but as I understand the article they are now going to charge *all* suppliers, essentially just for stocking their product. If I'd known that was common practice when I was self-employed, I'd've written to AMD, ASUS and Antec asking them to pay me to use their components in my custom built systems! Looks like I might have missed a trick…
This will only drive up the prices of the devices sold.

Anyway, what'll they do when the manufacturers say “Get stuffed! We're taking our business to other outlets!”?
What are they trying to do shoot them selfs in the foot so they have a excuse on why they are going bust ..

No wonder shopping on line is cheaper.
And I thought that the only thing suppliers/manufacturers did was hand over some nice POS signs and stands