Samsung is in talks with Tesco to cut a direct deal to supply its smartphones to Tesco’s 250 plus Phone Shops, Mobile understands.
The deal will see Tesco taking smartphones directly from Samsung rather than via a mobile distributor, with dedicated Samsung zones set up within the Phone Shops with touchscreen devices which customers will use to order Samsung handsets.
If the deal goes ahead it would deliver a blow to Tech Data Mobile which is Tesco’s primary mobile distributor. One source said: ‘Tesco has rolled over and is going to take Samsung stock direct. This is all part of Samsung’s drive for world domination. Tesco is not in a position to refuse. Samsung is too big a customer. Ideally Samsung would like Tesco Phone Shops to take predominantly Samsung stock.’
The move is seen as part of Samsung’s wider plans to take control of its mobile supply chain and cut direct deals with all its key mobile accounts. It is also part of its aggressive drive to open Samsung branded shop-in-shop areas in as many stores as possible.
Sources also claimed the manufacturer is on a recruitment drive to ramp up its account management teams in preparation for its transition to direct contracts.
Retailers targeted by the strategy are said to include Argos, Asda, Sainsbury’s, Shop Direct, and Dixons Retail stores. Samsung already supplies its smartphones directly to Carphone Warehouse, Phones 4u and the four network operators. Sources said the strategy would result in all of Samsung’s retail accounts taken direct, with mobile distributors used to look after the dealer base.
However, distribution sources warned that Samsung could have difficulty sealing the deal and managing it. ‘It is a more complex procedure than Samsung gives it credit and it may take longer to roll out than they think because of the complexity of the negotiations.’
Another said Samsung could struggle to be flexible in its supplies. He said: ‘Mobile distributors are able to sit on stock which retailers can then call off as it suits them. Samsung just don’t have that facility to hold off stock. I can’t see how it can provide enough flexibility.’
A Samsung spokesperson said: ‘Tesco is a key partner for Samsung in the UK. We are investing in premium retail experiences with all our key partners and Tesco currently buys through distributors.’
Author: Carol Millett