Opinion: the supplier-retailer balance of power has changed for the worse

We floated in 1972, growing organically and by acquisition.

We took the business private in 2000 and finally sold the remaining companies to Li & Fung in 2007.

In 2008 we backed the founders of the shopping channel business High Street TV and exited successfully last year.

There are two main reasons why I have written a book.

First, I wanted to pass on the lessons I have learnt and make relevant observations.

We made more good decisions than bad, but only just…

Secondly, I am dismayed by some aspects of current business conduct and have a strong urge to articulate my views.

A virtuous circle of trust

When we were building footwear supplier Peter Black in the 1970s and 80s, Marks & Spencer was our largest customer, accounting for around 40% of turnover.

Both companies prospered because the relationship was based on a virtuous circle of trust and integrity which gave us the confidence to invest and produce outstanding product.

“The balance of power between supplier and retailer has changed for the worse”

In my opinion, one of the main reasons several leading high street names are struggling is that the balance of power between supplier and retailer has changed for the worse.

An example of retailers’ arrogant disdain is the practice of arbitrarily changing suppliers’ settlement terms halfway through a contract.

Suppliers dare not put their head above the parapet and complain as they risk losing orders in the future.

Marks & Spencer used to regularly ask us, ‘What are we doing wrong – what opportunities are we missing?’

The point is that there is so much frustrated/latent intelligence at the supply base that retailers could take advantage of.

Do not underestimate consumer intelligence

I really believe ‘good behaviour is good business’.

The pendulum has over-swung as regards the relentless drive for lower prices.

Price is only one component of value – quality and design are equally important.

“It is also difficult to build an ethos of teamwork and openness if the team is consistently changing”

One must not underestimate the intelligence and awareness of the consumer.

In its prime, Marks & Spencer were never the cheapest, but the quality of its product was recognised and its market share grew consistently.

It didn’t even have to advertise!

Dare to take risks

When I started in business, headhunters were only dangerous tribes in history books.

While this mobility of management does bring benefits, there is also a downside in that new management tends to be cautious and risk-averse.

It is also difficult to build an ethos of teamwork and openness if the team is consistently changing.

Compared with the past, there seems to be some reluctance to try new initiatives.

Senior management must make a conscious effort to reverse this trend.

• Gordon Black CBE is the former chairman of Peter Black. His book From Bags to Blenders: The Journey of a Yorkshire Businessman (Icon Books, £12.99) has just been published