As it approaches what some refer to as a potential boiling point with suppliers, Walmart Canada has begun to impose additional charges on them starting Monday (Sept. 14). Vendors have been resisting in meetings with the retailer after it unveiled the new charges, while a significant trade group indicated that a number of the talks remain ongoing, Financial Post reported.
Walmart is imposing a 1.25 percent charge on the cost of all merchandise sold to the merchant as well as a further 5 percent levy on merchandise sold online. The new charges will reportedly assist in funding the retailer’s Canadian operations refresh with funds put toward store revamps, supermarket delivery and distribution hubs.
Adam Grachnik, a representative for Walmart Canada, said per the report, “We launched the initiative because the Canadian retail industry is evolving and the way we work with suppliers needs to change, too.”
“Will anybody go nuclear? Maybe. We’ll have to wait and see,” Food and Consumer Products of Canada (FCPC) Chief Executive Michael Graydon said, according to the report, pointing to the idea of vendors removing merchandise from a merchant’s stores.
One unnamed official at a consumer goods maker told the outlet that they thought about delisting merchandise with the retailer but chose not to do so.
The news comes as Walmart is supplying vast financial resources — $3.5 billion — to improve retail locations in Canada and modernize technology in its retail locations.
Walmart Canada said in a July press release that its five-year plan seeks “to generate significant growth and to make the online and in-store shopping experience simpler, faster and more convenient for Walmart’s customers.” The retailer is especially aiming to enhance its online shopping business.
Walmart Canada President and CEO Horacio Barbeito said at the time that millions of shoppers opt to transact with the company through eCommerce and its stores each day.
“Today’s significant investment will position us for future growth and make Walmart Canada even better for our associates and our customers,” Barbeito said at the time.