Sobeys Inc. is turning up the pressure on its suppliers, demanding price cuts in the wake of its $5.8-billion purchase of Safeway Inc.’s Canadian stores.
The country’s second-largest supermarket chain, which added 213 stores in Western Canada when the deal closed, in early November, has told suppliers of food and other merchandise they will have to shave their prices by 1 per cent, retroactive to Nov. 3 – a move that observers say could prompt rival grocers to follow suit.
In a letter dated Dec. 24 and obtained by The Globe and Mail, Sobeys also says it will not accept price rises from suppliers through 2014, with some exceptions such as pharmaceutical items.
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