Food suppliers are pleading for government intervention after Loblaw Companies Limited flexed its muscles to squeeze more money out of suppliers.
“It continues to escalate,” said Michael Graydon, chief executive for Food and Consumer Products Canada referring to Loblaw’s move weeks after Walmart Canada squeezed its suppliers.
They’re creating an inflationary environment. ... It’s absolutely brutal behaviour, and further demonstrates why government needs to step in and put some fair practices in place,” Graydon said.
Loblaws is Canada’s largest supermarket chain which increased its purchasing clout when it added the Shopper’s Drug Mart chain.
Loblaws is increasing its fees by 1.2 per cent, its delivery fees from 0.85 per cent to 0.97 for deliveries to its distribution centres and from 0.26 to 0.3 per cent for deliveries to stores.
It is also pressuring its largest suppliers to spent more of their marketing and advertising budgets with Loblaw Media.
Loblaw Media uses PC Optimum loyalty program data to target ads to shoppers. Those larger suppliers were asked to sign new “customer marketing initiative contracts” by Dec. 1.
Loblaw president Sarah Davis reminded suppliers in letters sent on Thursday that the company plans to invest $6-billion over the next five years to improve its stores and e-commerce operations.
These guys' greed and arrogance knows no bounds.
