Loblaw Companies Limited plans to implement new fees on suppliers beginning January 3, 2021.
In a letter sent to suppliers, the company says it will apply a 1.20 per cent “strategic acceleration allowance reduction” on invoiced costs for all shipments and additional fees on supply chain handling, including a 0.12 per cent increase, from 0.85 to 0.97 per cent on distribution deliveries and a 0.04 per cent increase from 0.26 per cent to 0.30 per cent.
Loblaw said there would be “select exemptions for smaller companies, farmers and growers” but did not detail any criteria.
The company said the fees are being implemented to help offset the risk of higher prices for customers.
Loblaw says it is investing $6 billion in the coming five years to “improve our in-store and digital operations…ultimately we are investing to improve our service to customers and to protect them from the risk of higher prices. We are committed to keeping prices low. We are asking for your help.”
The move by Loblaw follows a similar announcement made by Walmart in July, when it announced plans to implement supplier fees beginning in September.