Do you know who pays for it when you Price Match @ a Grocery Store ? Surprise !!

The Manufacturer or the Vendor pays the retailer ( Grocery Store ) the difference back, when you price match or ad match a competitor's flyer ! The retailer doesn't absorb the loss , the Vendor/Manufacturer does.

So if No Frills has General Mills Cereals advertised in their flyer for $ 3.00 and you Price Match it at Wal Mart because they are selling it for $ 4.00 .

WM later on bills/invoices General Mills for the difference of $ 1.00 !!..the money they lost on the price match.

They (WM) don't absorb the loss, but force the vendor to do it. They hold them responsible and liable for letting their rival store get it & sell it for a lesser price.

I saw a couple of Senior high level retail analyst talking about this. This is the NORM in the grocery industry in Canada.

Are you serious? This sounds "too bad to be true". Can you post a link here so we can read it here and start our little chit chat about it.

Based on what you said, OP, this sounds like a new form of grocery listing fees. You know, where manufacturers pay grocery stores for premium shelves to place their products in the aisles.

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Originally Posted by Ciel

Based on what you said, OP, this sounds like a new form of grocery listing fees. You know, where manufacturers pay grocery stores for premium shelves to place their products in the aisles.

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Yup. Check the video below, especially when " Grocery Store Wars " slot/section starts. The power has shifted BIG TIME to the retailers, not the vendors.

http://tvo.org/video/programs/the-ag...of-consumption

Also this article about Loblaws. Other Grocers also have similar policies with their Vendors & Suppliers.

http://www.theglobeandmail.com/repor...ticle24734138/

Among the practices it is probing are:

• Its “active ad match policy,” in which Loblaw adjusts the price of a product in response to another retailer’s flyer and requires the supplier to compensate the grocer in “a margin-protection agreement.” The policy has been in place since the 1980s and applies to its Real Canadian Superstore and some Extra Foods stores in Western Canada.
• Its “cost increase policy,” in which Loblaw pays a wholesale price increase from a supplier but finds the market price generally unchanged, and bills or debits the supplier for an amount equal to the price increase on the assumption the supplier had not imposed its price increase on other retailers.
• Loblaw told the bureau that such compensation requests are “infrequent and affect a small number of suppliers,” the document says.
• Its “ad collision policy” in which Loblaw requests compensation from a supplier when the grocer has identified a product in another retailer’s flyer that is promoted at a lower price than the one in Loblaw’s flyer in the same period. It has been in place in some form since 2010.

Very interesting and thanks for posting.

Yes, very interesting and thank you for sharing.........................................:-)

I was always a little afraid to price match because I thought the store would be losing the money. Very interesting read. Thanks OP! :)

Quote:

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Originally Posted by tjthemanto

Yup. Check the video below, especially when " Grocery Store Wars " slot/section starts. The power has shifted BIG TIME to the retailers, not the vendors.

http://tvo.org/video/programs/the-ag...of-consumption

Also this article about Loblaws. Other Grocers also have similar policies with their Vendors & Suppliers.

http://www.theglobeandmail.com/repor...ticle24734138/

Among the practices it is probing are:

• Its “active ad match policy,” in which Loblaw adjusts the price of a product in response to another retailer’s flyer and requires the supplier to compensate the grocer in “a margin-protection agreement.” The policy has been in place since the 1980s and applies to its Real Canadian Superstore and some Extra Foods stores in Western Canada.
• Its “cost increase policy,” in which Loblaw pays a wholesale price increase from a supplier but finds the market price generally unchanged, and bills or debits the supplier for an amount equal to the price increase on the assumption the supplier had not imposed its price increase on other retailers.
• Loblaw told the bureau that such compensation requests are “infrequent and affect a small number of suppliers,” the document says.
• Its “ad collision policy” in which Loblaw requests compensation from a supplier when the grocer has identified a product in another retailer’s flyer that is promoted at a lower price than the one in Loblaw’s flyer in the same period. It has been in place in some form since 2010.

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Really interesting. Thanks for posting!

Silk

It used to be Push marketing i.e the Vendor would push the product to the manufacturer and call the shots, just 20-30 yrs back.

But Information technology and control of data, changed that. Now the retailers PULL the product from the Vendor as they ( stores ) realised that we control the shelf space, we know what products are selling or not selling, we control this info, knowledge and power, not the Vendor, so we will make them pay.

Some of the bullying tactics by retailers :

1. Charging the Vendor a lot to advertise in the flyer.

2. Charging them to put their product at EYE level. The products on the bottom shelf or top level sell less, than the ones on the eye level. Charging more for End Caps i.e End of Aisle displays,Bulk displays etc.

3. Charging them FINES if the product comes in late..late delivery charges. Less quantities are delivered, there are fines for that too.

4. Retroactive pricing. So even if the contracts are signed, product is delivered and sold a few months or years back. The retailer will go back 1 year or 5 years and say, hey we need a 1 % discount now on the products you delivered 1 year back and give us a refund for that ! This can go into millions of dollars !

5. Charging them a lot to launch a new product or flavour in the store. So much so that its not even worth it for the manufacturer to launch a new product anymore in a store due to these exhorbitant fees.

6. Making sure no other retailer gets the product for a lesser cost than them. And if they have to Price Match, the Vendor has to pay the difference.

7. Ridiculous returns, exchanges from customers are dumped on the Vendor and the Vendor has to absorb it.

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Originally Posted by Ciel

Based on what you said, OP, this sounds like a new form of grocery listing fees. You know, where manufacturers pay grocery stores for premium shelves to place their products in the aisles.

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A certain grocery chain asked us to pay $5000 per store to display our products. We declined.

I haven't read full thread yet, will do it tomorrow after i am done with my exam. But what i have read sounds very scary to be a manufacturer. I wouldn't want to be a manufacturer in this time. :omg: i am just happy to be a price matcher, couponer, points collector customer. :embarassed:

I don't know why the prices are still so high in grocery stores and margins so small and profits so thin inspite of all these shenanigans.

its not like they pay their workers big bucks either..its mostly minimum wage. I guess it must be high rents for stores, waste of utilities ( electricity mostly ), wastage of produce, shop lifting etc that keep margins razor thin for grocery stores :(

I think they should get rid of paper flyers, lot of wastage and not eco friendly. Have more eco friendly lighting in the store to save money.

The thing is, the manufacturers will eventually pass the cost back to customers. So people who don't price match are actually paying. It's zero-sum game.

Cashier's should be trained on this, so they don't give people a hard time, when doing legit Price Matching.

I agree with everyone who said that this is very interesting -- thank you for sharing!