Sobeys next in line to hike supplier fees after Loblaw, Metro, analysts say

Analysts say Sobeys Inc. will likely follow its Canadian competitors in raising supplier fees, a move they say could lead to higher food costs, fewer brands on store shelves and less competition.

Loblaw told suppliers last week that the cost of getting products on shelves would go up in January. 

Walmart Canada announced a fee hike in July that prompted United Grocers Inc., a national buying group that represents Metro Inc., to tell suppliers it expects the same cost reductions as competitors. 

University of Guelph food economist Michael von Massow says all the big grocery stores will likely follow suit in an effort to stay competitive.

Von Massow says the fee increase will almost certainly be passed on to consumers, and could lead to a consolidation of choice on store shelves if some suppliers can’t afford the increase in fees. 

Sobeys did not immediately respond to a request for comment.

This report by The Canadian Press was first published Oct. 26, 2020.

Companies in this story: (TSX:L, TSX:MRU, TSX:EMP.A)

The Canadian Press