Memo

TO: / ALL SUPPLIERS, ALL BUYERS
CC: / JACO DE SWARDT
FROM: / GENINE CLOETE
DATE: / 25 JANUARY 2017
RE: / PRICE INCREAES PROCESS

The purpose of this memo is to communicate the price increase process to suppliers.

  1. DOCUMENTATION REQUIRED

Shoprite requires the both of the following two documents:

  1. The price increase letter from the supplier.
  2. The completedShoprite price increase proposal template(Excel document).

Below further explanation of the details that should be contained in the required documentation.

1.1.The price increase letter from the supplier

a)The price increases should be completed on the supplier’s company letterhead.

b)The price increase letter should be signed by a director of the supplier’s company.

c)The letter should be addressed to the Shoprite Foods Buying director, Jaco de Swardt.

d)The letter should contain:

  • The products, group of products or category on which aproposed price increase will be effective.
  • The effective date of the price increase.
  • A motivation for the price increase.
  • All prior price increases for the past two years for the same products, group of products or category.

1.2.The Shoprite price increase proposal template

For every category that you are proposing a price increase you have to complete the following columns on the Shoprite price increase proposal template(Excel document):

a)Company name as on trade term

You have to select the name that is on your Trade Term Agreement. Click on the hyperlink or select the green tab in the Excel document to view or search for the name that is on your Trade Term.

b)Shoprite category

Only standard Shoprite category naming convention can be used. To see a full list of the categories, or search for categories, click on the hyperlink in the Excel document or select the blue tab.

c)Weighted average price increase (%)

This must be completed per category, based on the items sales value (to Shoprite Group) contribution in the category. Click on the hyperlink or select the purple tab to view an example of the calculation.

d)Date Shoprite was informed

This is the date on which your proposal was sent with the official letter along with the completed Shoprite price increase proposal template(Excel document).

e)Proposed effective date

This is the date from which you are proposing that Shoprite must start purchasing at the proposed new prices.

f)Proposal by

Name of the authorised person submitting the proposal on behalf of the supplier.

g)Title

Company title of the authorised person submitting the proposal.

h)Minimum increase in category

The percentage increase of the item with the lowest percentage increase in the category.

i)Maximum increase in category

The percentage increase of the item with the highest percentage increase in the category.

j)Motivation / comment

A brief motivation for price increase and any other information to explain for example the reason for high variance in minimum and maximum price increases.

k)Row information complete

This column will automatically be ticked if all the columns have been completed.

  1. PROCESS

Below the process:

  1. Both the required documents should be emailed to Genine Cloete at .
  2. If the documents are not correctly completed or if it is incomplete no further processing of the proposed price increase will be done by Shoprite until such time as the correct documents are received.
  3. No price increases are accepted with an effective date between 15 November and 31 January.
  4. Within 3 weeks of receipt by Shoprite Head Office of the proposed price increase, the proposed increase will be communicated to the divisional buyers.
  5. Receipt by Shoprite Head Office of the proposed price increase does not guarantee that the price increase will be accepted by the divisional buyer.
  6. Suppliers will have to make an appointment with the divisional buyers to process the price increase.

Regards

Genine Cloete

Genine Cloete | Shoprite Group | Secretary to Jaco de Swardt |

Cnr William Dabs and Old Paarl Roads, Brackenfell, Cape Town |

Tel: +21 9804070||