Many could argue Walmart Canada was the reason behind the idea of a grocery code of conduct back in 2020. Now, it appears the reason wants to be part of the cause.
In the midst of the COVID-19 pandemic, Walmart Canada hit suppliers with new fees to help deal with a $3.5 billion investment in stores and ecommerce. Loblaw Cos, another Canada grocer giant, followed with its introduction of fees. On March 27, Walmart Canada President and CEO Gonzalo Gebara was in front of the House of Commons expressing his desire to join other grocery retailers in the formation of the code of conduct, which is supposed to level the playing field between suppliers and retailers. He has received a draft of the proposal and said the company is currently reviewing it.
The code of conduct would set up transparent fair practice standards on retailers and suppliers. Those who want to buck the standards would face a penalty.
Gebara still defended Walmart Canada’s fees on suppliers in 2020, telling Canada lawmakers the company has always been transparent about such things.
Canada continues to be entrenched in double-digit food inflation. Groceries costs in February were up over 10% compared to a year ago, and inflation overall stands at just over 5%.
Gebara said Walmart Canada was not trying to capitalize on the inflation, and pointed out the company’s operating profit and overall gross profit margins as it attains to food is lower compared to years prior. Walmart Canada has been fighting inflation by controlling operating costs, identifying improvements in the supply chain and keeping prices down on its private label.
It was the second time in less than a month a high-ranking grocery official was facing members of the House of Commons. In early March, CEOs and presidents of Loblaw Cos. Ltd., Metro Inc. and Empire Co. Ltd., which run chains including Sobeys, Safeway and FreshCo, talked with lawmakers in an effort to clarify the continued high price of groceries, or greedflation. The executives dismissed the notion that the grocers themselves are behind prices that have skyrocketed over the last year. The general consensus was food inflation is a global problem, and a few of the officials were wondering why American companies which do business in Canada were not called on for questioning.