Indie grocers say new grocery code is already reshaping supplier relations
Years in the making, the Canada Grocery Code finally came into effect on January 1—and independent grocers say it’s already changing how they do business.
At Grocery & Specialty Food West in Vancouver this week, independent grocers took to the stage to share how the voluntary code is improving their relationships with suppliers.
“The real objective of the code is to provide a framework for resolving issues, getting people to talk to each other,” said Gary Sands, senior vice-president policy and advocacy at Canadian Federation of Independent Grocers (CFIG), an organization that has long championed a grocery code of conduct.
Moderating a panel that included Giancarlo Trimarchi, president of Vince’s Market and Brian Bradley, president of Stong’s Markets and current CFIG chair, Sands stressed the code isn’t designed to make independent grocers equal with the chains, in terms of buying power, but noted the dispute resolution process built into the code, is “the great leveller."
“Even if you’re a one-store independent grocer, if you’re a signatory to the code and you have an issue, you are treated exactly the same as if you were Loblaws, Walmart or any big supplier,” he said.
For Trimarchi, who serves on the board of the Canada Grocery Code, the biggest benefit of the code is that it has created a playbook with a set of rules on how retailers and vendors should respect and treat each other.
“Being a small independent, anything that I can do to get myself in a relationship with vendors where I can increase my stature, even by just being a simple signatory to the code, is going to be a good thing and is worth the cost of admission,” said Trimarchi.
He pointed to a recent instance where Vince’s was given little notice of a fuel surcharge that a vendor was about to apply. Trimarchi was able to respond to the vendor—also a signatory to the code—and remind them of a code principle around non-unilateral decision making around fuel surcharges. This prompted a conversation with the vendor leading to a mutual agreement. “These collaborative conversations were never held before,” said Trimarchi. “It’s [the code] has changed how we deal with each other.”
READ: Developing the grocery code’s dispute resolution process
Bradley echoed the sentiment, noting the code has underscored the importance of transparency, particularly when it comes to price increases.
Large chains can demand 60 or 90 days’ notice of increases, Bradley said, adding there’s no reason independents shouldn’t expect the same. “Asking for and developing the process for hearing about price increases has been a big one for us,” said Bradley.
The code is also prompting independents to formalize their own expectations. At Vince’s Market, Trimarchi has introduced a “retailer-led agreement” outlining the terms of engagement that the grocer is seeking from suppliers. Trimarchi said it’s a move away from simply accepting a supplier agreement at face value and reciprocate with “our own” – one that reflects the principles of the code. The response he said, has been positive, with suppliers showing willingness to collaborate in this new code environment.
Bradley agreed that the code has helped strengthen relationships with its suppliers, but noted more education is needed to ensure independent grocers fully understand and leverage the code’s benefits. That, he said, will be a key focus for CFIG in the year ahead.
“There’s a new way of doing business in this country now,” Sands told attendees. “If you’re a signatory to the code, it would be a tragedy for an independent grocer in Canada after all these years of fighting for this, to not take this opportunity and run with it.”
