2/6/2008 10:58:00 AM
20:20’s Tesco share slashed
20:20’s grip of the prized Tesco supply contract appears to be weakening as the likes of Brightstar, Data Select and Unique emerge as more prominent distributors for the supermarket giant.
20:20 is believed to have now dropped to below a quarter of the supply business for Tesco, having once been the sole supplier around two years ago.
Tesco is increasingly becoming a major player for prepay sales, now shifting up to 1.5 million phones per year.
Indications vary on the exact number of ‘lines’ each distributor is providing, with manufacturers saying that 20:20 now supplies less than 25% of the 33 lines at Tesco. Brightstar is believed to supply around half, with Data Select and Unique picking up the remainder.
Mobile spoke to some distributors who were fearful of commenting, even off-the-record, with the supermarket giant pinning suppliers to strict non-disclosure agreements, and warning that they could lose the account.
One senior industry source said: ‘Tesco will chop and change all the time and look at opportunities to cut a better margin in the market. They will push their suppliers very hard.’
Distribution sources had suggested before Christmas that Tesco’s terms were so painful they wouldn’t join in the tendering process, although all have since made bids.
A former director in distribution said: ‘It’s effectively a loss leader for some of the guys [distributors] out there. They wear the Tesco badge to go out and win business on the back of it.’
A spokeswoman for Tesco said: ‘It is part of our corporate policy never to comment on our supplier relationships, so unfortunately there is nothing we would like to say.’
20:20’s closeness with Nokia still gives it considerable clout in the market. It is still the dominant player, holding the biggest supply deals for Asda, Sainsbury’s and Argos.