‘Devilish’: Walmart Canada’s ‘Absolutely Furious’ Suppliers Plan to Recoup Their Investments with New Fees

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Our customers’ buying habits are changing, our industry is changing, and so is the way we collaborate with our suppliers.

Letter from Walmart Canada to suppliers

“The other retailers are not going to sit still. They’re going to say, ‘Well, I want that too,’ ”he said. “We’re just going to need the government’s help to get it under control or there won’t be a manufacturing plant left in this country in five years.”

Earlier this week, Walmart announced a large injection of funds aimed at staying on top of shopping habits, which have shifted dramatically to online ordering during the pandemic.

“The buying habits of our customers are changing, our industry is changing, as is the way we partner with our suppliers to meet the needs of our customers,” read Friday’s letter, signed by the head of the Walmart Canada executive Horacio Barbeito and Merchandising Manager Kieran Shanahan.

The $ 3.5 billion investment, which will be spent over the next five years, will be used to expand Walmart Canada’s online ordering capabilities, particularly in the grocery delivery business, to the construction of two new distribution centers and the modernization of 150 of its 400 Canadian stores with new technologies, including equipment. for clerks to process payments anywhere in the store.

“We are making these big investments. They certainly benefit our supplier partners, ”Shanahan said in an interview. ” We want to make sure we share the cost of this…. We certainly think it’s very fair and reasonable to do so.

Walmart said the new fees – to be billed in addition to any existing fees set out in Walmart’s individual agreements with suppliers – “will partially offset the necessary investments” but will not clarify how much it expects to recover by charging the fees. .

“As much that would be interesting for you, but it is certainly interesting for our competitors too. So it’s not something we would share, ”said Shanahan. “But I’ll tell you: it’s a small amount. And it’s more about the ongoing business model of how we work together…. It is about developing our relationships with our suppliers. ”

The new fees will begin on September 14. While the infrastructure investment will span five years, Walmart confirmed in an email that the fees for suppliers will be ongoing.

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