|Delayed - 11/24 04:18:05 pm|
Metro : Sobeys next in line to hike supplier fees after Loblaw, Metro, analysts say
|10/26/2020 | 02:05pm|
Analysts said Monday that
Loblaw told suppliers last week that the cost of getting products on shelves would go up in January.
Citing plans to invest
Food and grocery analysts said the fee increases could hurt food processors, leading to more imported and private label foods in supermarkets.
They also said it puts independent grocers at a disadvantage, since they don't have the leverage to pass on rising costs to suppliers.
"I'd be surprised if other big grocery retailers didn't do the same thing," he said Monday. "We're likely going to see this happen across the board."
Although Loblaw told suppliers that it is committed to protecting its customers from the risk of higher prices, analysts said the fee increases will likely be passed on to consumers.
"Grocers will always position themselves as the defenders of consumers," said Charlebois, the director of the
"That's how they present these measures, but the costs will eventually be passed on."
He said the bigger concern is the impact on food manufacturing and independent grocers in
"We have an oligopoly in food retail in
Charlebois said he expects to see more private food labels in grocery stores and fewer food manufacturing jobs in
"Food manufacturing is really the centerpiece of our entire agri-food sector and it's slowly eroding as a result of all of these measures."
He said smaller stores without the leverage to make similar demands or pass on the costs of doing business can't compete.
"They're off-loading costs on to suppliers that the independent grocers have to pay for ourselves," said Sands, the organization's senior vice-president of public policy. "It's further threatening our ability to stay on the playing field."
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Companies in this story: (TSX:L, TSX:MRU, TSX:EMP.A)
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