retail news in context, analysis with attitude

The Canadian Press reports that Empire Company Ltd., parent company to retailers that include Sobeys, Safeway and FreshCo, and Food, Health & Consumer Products of Canada, described as "an industry group representing food manufacturers," have come to an agreement on a "a draft grocery code of practice they say takes aim at unfairness in the market."

According to the story, "the proposed code addresses long-standing issues like arbitrary fees, cost increases imposed without notice, and late payments … The code would enshrine a set of good-faith industry business principles, such as requiring written agreements between large retailers and suppliers and ensuring changes to business terms are not imposed arbitrarily."

Empire CEO Michael Medline said that there were “unprecedented strides” made during the pandemic to assure the continued viability of the supply chain.  “Let’s not go back to the old way of doing things,” he said in a statement. “We hope our principled proposal will be a springboard to move our industry forward.”

The Canadian Press writes that "the code would be a first of its kind in Canada but pulls lessons from similar documents, most notably the U.K. Groceries Supply Code of Practice.

"The code was formally submitted Thursday to a federal, provincial and territorial working group examining the issues plaguing the grocery industry, including the imposition of unilateral costs on suppliers, fining suppliers for shortages and offloading operating costs onto suppliers."

The story points out that "the proposed code of conduct comes after Loblaw Companies Ltd., Walmart Canada and United Grocers Inc., a national buying group that represents Metro Inc., imposed higher fees on suppliers in recent months.  The unilateral moves made the cost of getting goods on store shelves more expensive for food manufacturers."

KC's View:

Let me yet again remind you of the Latin proverb:

Trust, like the soul, never returns once it goes.

There seem to be a lot of cases in both the US and Canada where retailers imposed new fees on supplier "partners" that seemed designed to obviate trust, not build it.  This is no way to conduct commerce … focused on short-term, rather than long-term, gratification.