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The Globe and Mail reported that Metro Inc. will ask suppliers to reduce prices by 1% in order to lower prices on shelves starting Dec. 5, 2016.
The paper said that the No. 3 grocer’s executives needed the support of its suppliers to reduce store prices and has introduced programs to generate more sales and savings in this aim.
The Montreal-based grocer follows Loblaw’s pricing practices with suppliers. This fall, the Competition Bureau ramped up its inquiry into Loblaw’s practices.
Michael Graydon, CEO of Food and Consumer Products Canada, was quoted in the Globe and Mail as saying, “This is the continued result of a consolidated retail environment that has resulted in the retailers putting huge pressure on the manufacturers to improve the retailers’ profitability.” He added that the cost demands will result in lost jobs and plant closures in the food manufacturing sector in Canada.
Sylvain Charlebois, dean of the management faculty at Dalhousie University in Halifax concurred adding in the Globe and Mail article that “the heavy corporate concentration in the Canadian grocery sector has given the key players a lot of clout with suppliers, and that “we all need to be worried about our food processing capacity in Canada.”
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