Dive Brief:
- Tesco is expected to announce major changes to its supplier system this week, dumping its controversial system of rebates and penalties for companies that sell to the chain, the Sunday Times reported.
- The largest supermarket chain in the UK will also announce layoffs at its headquarters and regional offices.
- The retailer has not released details, but has promised an update of its turnaround plans for Thursday.
Dive Insight:
The plan to simplify Tesco's system of buying from suppliers may prove to be a very, very wise move. The existing, complicated system of rebates and penalties are at the root of the accounting scandal that has brought havoc to the chain. A new, simpler system - Tesco gets discounts when it buys a lot of something - would make it much easier to clean up the retailer's accounting.