Author: Angus Craig

Shoppers and investors were taken by surprise when Tesco announced a £250m black hole in their profits last month. Tesco’s suppliers, however, were not. The supermarket, the second-largest retailer in the world, has been under pressure for some time. Shoppers are increasingly turning their backs on the big weekly grocery shop in favour of home delivery services, discount rivals Aldi and Lidl and local convenience stores. These trends have hit sales at Tesco’s big out-of-town supermarkets and its market share has declined significantly in the past year. Profit warnings led to the resignation of the Chief Executive, Philip Clarke, in July. The honeymoon for his replacement, Dave Lewis, didn’t last long. In the first few days he was confronted by a whistler blower who warned that Finance were incorrectly booking payments received from suppliers related to in-store promotions. Unfortunately Dave Lewis’s misery didn’t stop there. Recently, Tesco announced that its profits had been overstated by £263m, more than have been initially estimated and not long after, the Serious Fraud Office (SFO) confirmed that it is carrying out a criminal investigation.

Today we're delighted to welcome Angus Craig from Craig Hall Consulting who shares some interesting perspectives on Mergers, acquisitions and supply chain finance. The last year has seen some significant changes in technology and the economic environment for supply chain finance (SCF). Together, these changes will dramatically affect the SCF market. Although there will be many winners, there will also be some losers. Purchasing Insight has been charting the changes in technology for some time. In February this year for example, Pete Loughlin observed that Taulia had automated or removed the cost of Know Your Customer (KYC) from their traditional SCF package, thereby opening up the market. In September last year he commented that Crossflow Payments offer their EDI platform for free, encouraging suppliers to switch. All of these technology changes have made the SCF proposition more compelling and have increased the number and value of transactions. The changes in the underlying economic environment need to be viewed in two separate ways: those economic trends that encourage customers and suppliers to adopt a SCF solution and those that affect the intermediaries that offer it.