Tesco seems to have been cannibalizing not only its own supply chain but also itself – or at least its own accounting practices. Its accounting was designed to push up profits. And that relentless push for profits has also lead to ever-increasing pressure on supermarkets’ supply chains. As a result suppliers pay in every sense to have their products sold in big stores. The awful results of this for small suppliers in the developing world are well-known. Now we are aware of the awful results for Tesco itself.
Of course it is unlikely that Tesco is alone in this. All the big supermarkets tend to treat their suppliers badly. So should we assume that all of them are also indulging in creative accounting? It would not be very surprising if they were.
Tesco’s aggressive accounting culture expresses the hungry logic of unfettered capitalism. And how much future can there be for a capitalism that starts trying to consume itself?
Well, capitalism may not be quite at the end of the road quite yet, but it is certainly at the end of its tether. Tesco’s behaviour is an example of the sort of things companies find themselves doing when capitalism is pushed too far.