Canada’s largest grocer sent letters to its larger suppliers Thursday, letting them know it will cost more to stock their products on its store shelves, starting Jan. 3, 2021. Loblaw will charge an extra 1.2 per cent on the cost of goods sold and an additional fee; small suppliers are exempt. (Financial Post)

Talking point: “As we face pressures, one option is higher prices for customers, but we don’t want to take that approach as Canadians are facing enough financial pressures,” said Loblaw spokesperson Catherine Thomas. The firm asked suppliers in one version of the letter to “keep in mind” its $6-billion investment over five years in stores and e-commerce upgrades. It also said suppliers continue to raise charges on grocers. Michael Graydon, CEO of the industry association Food, Health & Consumer Products of Canada, called the news “absolutely ridiculous.” It follows a Walmart Canada announcement in July for a new charge of up to 6.25 per cent of the cost of goods from more than 3,000 of its suppliers, in an effort to offset the cost of its $3.5-billion capital investment plan. Grocers are among the Canadian retailers that experienced an e-commerce boom during the pandemic, with Loblaw reporting a jump of 280 per cent in online sales, but that came at a cost, as companies rushed to beef up infrastructure.