Loblaw follows Walmart in imposing new fees on suppliers to help pay for upgrades
Loblaw Cos. Ltd. has told its suppliers that it will charge more fees to get their products on shelves, escalating an already tense standoff between supermarkets and food producers. Loblaw, the largest grocery chain in Canada that owns Shoppers Drug Mart, Real Canadian Superstore and No Frills, on Thursday sent letters informing suppliers of the extra fees while also asking them to “keep in mind” that it is investing $6 billion over the next five years to upgrade its stores and e-commerce operations. Loblaw, however, said the new fees were necessary, in part, to help keep food prices low because suppliers keep pushing to raise what they charge grocers. Days after the Walmart announcement, United Grocers Inc., a national buying group that negotiates supply deals on behalf of Metro Inc., Save-on-Foods, Alimentation Couche-Tard Inc. and other retailers, told its suppliers in a letter that it would expect the same discount that Walmart is imposing on them. But Loblaw’s letters on Thursday appeared to be the first since Walmart to tie a multi-billion-dollar investment to a request for more fees.