The Ivy restaurant chain owner is the latest firm to suffer a PR disaster caused by its heavy-handed treatment of small suppliers.
A letter from the firm’s procurement head to all suppliers stated the firm would implement a 2.5% discount on all invoices. It read, “This mandatory discount is being applied in response to the current increased costs of trading”. The letter was also sent to suppliers of Bill’s, Le Caprice and other brands in the Richard Caring group. You can read it in full here.
Why was it such a PR disaster? At one level, it was simply another example of a big firm pushing its own problems onto its small, independent suppliers of food, drink and other services.
Yet this was worse. There were two reasons – consistency and credibility.
We have all read how difficult times are for hospitality business are struggling with increased staff costs and squeezed consumer demand. However, the group, owned by Richard Caring, announced just three weeks before that it had defied the struggling market to post record returns. So much for consistency.
Suppliers were furious and the letter became a public scandal overnight.
So much so, that Richard Caring had to step in and apologise. He has announced the letter was ‘an error’ which he had not approved and that any discussion with suppliers regarding terms of business would be one:one and voluntary.
That is where the credibility of the firm has taken a hit. When the owner backtracks on a major strategic decision taken without his authority, where does that leave the board? Where dis it leave Mr. Jeremy Evans, head of indirect and beverage procurement in particular?
Given that Richard Caring was in talks to sell the group, it hardly gives any prospective owner confidence in the management team.
How Ivy could have avoided PR disaster
So, what’s the moral of this story?
- If you are going to go big with any decision, make sure all internal stakeholders are on board
- Choose language carefully – a mandatory discount is not the way to ‘support each other’
- Pick your moment to act – not just after you’ve made record profits
- Everything you do forms part of a bigger narrative about your brand – credibility built over decades can be lost in an instant
To chart your way through business challenges without losing sight of your reputation, give us a call at 360 Integrated PR. We’d love to help.