Suppliers slam fees as Walmart Canada passes on investment costs

MISSISSAUGA, Ont. — Walmart Canada says its $3.5 investment in stores and e-retail will improve the customer experience and boost sales, but new fees aimed at recovering costs have outraged suppliers. In a letter last week, Walmart explained to vendors that beginning September 14, it will be charging a new “infrastructure development fee” of 1.25 percent of the price of products, with an additional five percent for wares sold online. All of this is on top of existing fees set by arrangement with each vendor.

The retailer considers the fees a fair trade-off for suppliers, who it says will benefit from the investment plan in increased sales. But at Food and Consumer Products of Canada, CEO Michael Graydon calls the timing of the announcement “diabolical” and says his members who supply Walmart are “absolutely furious.” He is calling on federal and provincial governments to act in order to prevent other retailers from making similar moves. “When you look at five percent on e-comm sales — that’s your margin,” he told the Financial Post. “So you’re going to give it away.”