The network announced earlier this month that it would reduce retailers' commission on its top-ups by 1% from August 1, leaving stores with as little as 3.5% margin. The move has been met by a landslide of condemnation from the convenience sector, which accounts for some 20% of pre-pay top-up sales.
A campaign spearheaded by Spar retailer Kevin Hunt, has united independents with over 6500 store owners pledging their support at his website, www.topupratecut.biz, and several symbol groups and wholesalers backing a two-day boycott of Vodafone products last week. Further action is planned for this week.
The combined stand by independents has captured the attention of the national media, with Kevin and other retailers representing the campaign on TV and radio and in newspapers.
Kevin said: "We have successfully held three protest days on Friday 11 July, Friday 18 and Saturday 19 July when we refused to sell Vodafone products.
"I am planning further action so please keep logging on to our website, www.topupratecut.biz for updates. This is an industry-wide issue. The more retailers sign up, the more Vodafone will listen to us.
"If you agree with me, please fill in your details and your name will be added to the petition and a forward email will go to Vodafone."
Vodafone has said its 1% cut in retailers' commission would fund investment that would lead to more use of mobile phone services and greater footfall for convenience retailers, but Spar trading director Chris Lewis said the network’s statement that it would not cut rates again for two years indicates that its long term strategy would probably be to continue reducing rates. “History shows that when one network reduces, the rest will follow, so the long term picture is bleak,” he said.
“This undermines the business model for the category, and potentially threatens the long term future of the service providers such as PayPoint and PayZone, as what little profit retailers make mainly comes from the top-up area, not utilities.”
PayPoint and Payzone both said last week that they were in negotiation with Vodafone, but declined to comment on the retailers' action.
Kevin Hunt said he is encouraging customers to support networks other than Vodafone. “I’m giving away SIM cards for the other networks to Vodafone customers, in an effort to persuade them to switch,” he said. “I am also looking at my business handset account, with the intention that Vodafone will not have my business in the future.”
Look out for announcements of further campaign activity at www.convenience-store.co.uk