The new Canadian code of conduct for grocers, the final version of which should be determined in the coming weeks, should help improve the relationship between suppliers and grocers, believes Metro President and CEO Eric La Flèche.
The big boss of Metro recognizes that relations with certain suppliers have experienced moments of tension. “Not everyone, in general, relations are good,” he qualified in a press scrum on Thursday, on the sidelines of a speech before the Canadian Club of Montreal.
Metro and other industry members have worked to develop a voluntary code of conduct. A proposal for a final version is currently undergoing a consultation process until May 30.
The document includes a process for resolving disputes. While it does not provide for the imposition of fines, a number of potential disincentives to encourage compliance, such as the potential communication to the public of “bad behaviour”, are provided.
The industry-led code of conduct for grocery stores has been proposed as a way to address long-standing issues such as arbitrary fees, cost increases imposed without notice, and late payments.
“I think what’s in there will be beneficial for having more transparency and then things will be clearer between the different players,” commented Mr. La Flèche.
By offering guidelines, the code will provide a guide to conduct that will help reduce “unpleasant surprises” and “one-sided decisions,” according to the leader.
He gives an example of undelivered orders as a situation that would be clarified by the code. “When we place an order that isn’t filled, then we can’t deliver to the store and we frustrate our customers because we don’t have the product, what happens? Can we charge a penalty? If so, under what circumstances. Then it will be clearer for everyone. »
“Nobody wants to be imposed unilateral increases for nothing, without justification,” he added. Them [les fournisseurs] do not want fees imposed on them unilaterally, without justification either. So it’s negotiation that will be transparent. I think it should work. »
No unilateral costs
Metro denies having unilaterally imposed fees on its suppliers in the wake of the launch of the new loyalty program Me. In January, suppliers expressed their frustrations with the fees charged to participate in the program, in an article by The Press.
“These are not imposed fees,” says the leader. It is a voluntary program. There isn’t a supplier that is obligated to do business with us and then come on board the Me program. It is sure that he will perhaps do better business with us if he participates in the program. »
The testimonies of disgruntled suppliers would not reflect the mood of the majority, judge Mr. La Flèche. “Most go into this with a smile and enthusiasm. »
The update of the loyalty program extends its reach to the company’s other banners, notably including the Jean Coutu and Première Moisson pharmacies.
The program would make it possible to better target the behavior of customers who visit more than one brand of the Montreal society. “We think we offer more to our suppliers,” said the boss of Metro. We have richer information through our network. It’s worth something. If vendors want access to that, well, that’s worth something. If they want to work targeted promotions with us, that’s worth something. »
Signs of inflation easing
During his lecture, Mr La Flèche said he saw signs of a moderation, but he would like the price spike to die out sooner.
In response to critics who have blamed grocers for rising food prices, the Metro boss reiterated that groceries are the last link in the supply chain.
Rising prices are visible at the grocery store, but inflationary pressure is present at every stage, such as production and transportation, he points out.
In fiscal 2022, Metro had nearly 27,000 requests for price increases of more than 10% on average from its suppliers for dry foods alone (which excludes meat and fresh fruits and vegetables ), reported the leader last January.
Since then, he says he sees signs of moderation. “The quantity of requests is falling, the rate of increase in demand has also fallen, he specifies in a press scrum. There are still some, but it’s definitely a sign of slowing increases. »