LOBLAW SUPPLIER POLICIES FOR NATIONAL BRAND PRODUCTS

Transcription

1 LOBLAW SUPPLIER POLICIES FOR NATIONAL BRAND PRODUCTS The following is a list of our updated policies for all National Brand Product 1 Suppliers of Loblaw (which excludes Shoppers Drug Mart - Please refer to SDM Vendorboard for SDM policies and details). These policies are a condition of doing business with Loblaw and supplement Loblaw s Standard Terms and Conditions or any similar written terms and conditions you have in place with Loblaw. NEW PRODUCTS New listing presentations, product changes and product switches (pack, size, measure, description etc.) must be made twenty (20) weeks prior to first shipment (except products sold within our Home and Leisure division where they require (33) thirty-three weeks prior to first shipment). This window of time is required to align with Loblaw s Planogram (POG) process and will ensure that we are both offering customers new product innovation as soon as it is available. Products launched outside these windows may miss the planogram release and may not be considered until the next launch window. In order to maximize support for your products at Loblaw, all new products must launch at your best cost of goods and must enhance the profitability of the category it is being listed within. New Product must be presented to Loblaw at the same time as Supplier presents the item to other retailers (this includes new product market testing). Products cannot be developed as Display Ready Pallets (DRP) only. All products must be made available in corrugate cases. All products must be offered with minimum quantities as reasonably determined by Loblaw. We are committed to retail ready packaging (RRP). Products must be made available in RRP where plan-o-grams require it. Suppliers may be charged a listing fee for all new listings, or listings that require a change within Loblaw IT systems. Charges will apply specific to the category the item is being listed to or changed within. There are three types of standard fees: o New Listing Fee applied to items that are not currently in our assortment network o Switch Fee applied to items currently in our assortment network but that require a o change to the case pack, unit of measurement, UPC, etc. Admin Fees applied to items currently in our assortment network but that require a change to the display vehicle (display ready pallets, prepacks, etc.) The fees vary by category and your Category Contact can provide you with the details. Suppliers will comply with applicable deposits/taxes/levies and waste diversion requirements. Guiding Stars (applicable to food products only): To ensure accurate product ratings, Suppliers must immediately submit the most up to date product package for star rating evaluation. If there is a change to product formulations, you are required to provide Guiding Stars with updated nutritional information. GS1: All Suppliers are required to list each of their products (including image and dimension information) through ECC Net, Canada's National Product registry. GS1 link can be found at Loblaw requires Suppliers provide a full case sample (where applicable) for measurement and planogram purposes. All new article creation requests or updates must be initiated by the Supplier through the Article Workflow Tool. Loblaw will continually make assortment decisions with a category. Loblaw and Supplier will share equally in the cost of the discontinuation arising from the discounting of the product at retail. The Supplier will be charged 50% of the current Loblaw First Cost of the item(s) to support this discounting of product. Loblaw may provide the Supplier with the option to buy back the excess inventory from the Loblaw Distribution Centres at their own expense.

2 Suppliers to comply with Loblaw minimum code date requirements for stores and DC receipts. RETAIL READY PACKAGING POLICY Retail Ready Packaging (RRP) at LCL dictates that cases supplied must be easy to open (e.g. through box perforations, plastic overwrap on corrugate), visibly appealing and limit the risk of onshelf stocking damages. Through a phased approach, LCL requires a minimum of: o 50% of products purchased from suppliers to be shipped in Retail Ready Packaging by December 31st, 2019 o 80% of products purchased from suppliers to be shipped in Retail Ready Packaging by December 31st, 2020 o 100% of products purchased from suppliers to be shipped in Retail Ready Packaging by December 31st, 2021 Assortment decisions may be based on compliance to the RRP requirements above This policy is applicable to the following Grocery categories; o All grocery dry food categories in centre of store o All household cleaning and paper categories o All-Natural Value foods categories o All Dairy and frozen grocery categories o Selected HABA categories o Selected Processed and deli meats o Selected frozen BULK PACK SKU s All bulk pack items produced by Supplier must be presented and made available to Loblaw before or at the same time as Supplier presents the same item to other retailers. Suppliers must present Bulk Pack sku s that are compatible with Loblaw s distribution system. We require the best cost of goods on all Bulk Pack sku s vis-a-vis the retail size of the comparable product. COST OF GOODS CHANGES INCREASES & DECREASES All cost of goods increases/decreases Must be ed to Loblaw to costincrease@loblaw.ca and all relevant Division Category Directors. For products included in Seasonal Programs must be presented at the Seasonal Program product presentation meeting. Following the completion of cost of goods increase/decrease negotiations, supplier will Loblaw Conditional Maintenance Form to Category Director INCREASES ONLY LCL does not accept cost of goods increases other than those that are: Government-mandated (ex. CDC) or Directly resulting from commodity/input cost increases as verified by LCL Commodity Group 2 Further, cost of goods increases must be: National in scope (e.g. applied by the supplier to all of its retail customers) Must only be effective on a Sunday from LCL fiscal calendar P2 P11. 3 Minimum 12 weeks notice 12 weeks notice starts with submission of the following: 1. LCL Commodity/Input Form (including article # s for impacted skus) 2. Loblaw Conditional Maintenance Form

3 3. Letter from Vendor VP/Business Lead confirming that the proposed cost of goods increase has been presented to all retailers nationally Under no circumstance should a supplier indicate to Loblaw that a competitor of Loblaw Companies is accepting or declining a proposed cost increase or decrease. Product downsizing is considered a cost of goods increase, as a result, there must be a corresponding decrease in the cost of the product commensurate to its decrease in the size. DECREASES ONLY No advance notice is required for cost decreases. Must only be effective on a Sunday All cost of goods decreases must include with the following information: 1. LCL Commodity/Input Form (including article # s for impacted skus) 2. Loblaw Conditional Maintenance Form Full system (Distribution Centre to Store) floor stock protection must be provided on all cost decrease items upon the cost decrease effective date. o Floor stock Calculation: (current Loblaw First Cost new Loblaw First Cost) x units in inventory (DC and Store) TOP SHELF/PRECIMA Participation in Top Shelf/Precima is expected by suppliers EDI/DATA All vendors must be EDI compliant and must transmit all invoices. Invoices that revert to a non- EDI payment will be fined up to a maximum of $100. If you receive a purchase order from us with the wrong UPC number, cost or unit of measure (case pack), stop do not ship call your category contact. If the product is shipped Loblaw assumes you have accepted the purchase order as written and will not accept a vendor inquiry. Loblaw will pay the lower of SAP cost and Supplier Invoice Cost. In order to drive improved EDI Trading, Loblaw has implemented a non-compliance charge to a maximum of $100 per Supplier caused EDI invoice discrepancy, net of LCL caused issues. Investigating Supplier inquiries is a timely and expensive process for both Loblaw and the Supplier. Loblaw requires that all queries have the following minimum dollar value: A. Distribution Centre Inquiries minimum $50 per invoice B. Direct Store Delivery Inquiries minimum $25 per invoice i LISTING INTEGRITY & UNAUTHORIZED PRODUCT Suppliers will be charged up to $8,000 per item per Listing Integrity and /or Unauthorized Product shipment occurrence, net of Loblaw caused issues. o Listing Integrity issues are defined as listings submitted with incorrect Universal Product Code (UPC), incorrect European Article Numbering (EAN), incorrect Shipping Container Code (SCC), incorrect imaging, incorrect cost, incorrect product dimensions/weight or incorrect master pack dimensions/weight/configuration. o Unauthorized product shipment is defined as product that has not been listed or product shipped in excess of quantity agreed upon in writing by Category Director. CLEAR OUTS Loblaw requests clear-out stock based on its share of total purchases from the Supplier. We are committed to responding within hours after which time, Loblaw s share of clear out stock can be offer to Supplier s other customers. BONUS PACKS AND MULTIPACKS Loblaw does not accept Bonus Packs or Multipacks in the Grocery Department. If a Supplier launches any Bonus Pack or Multipack, Loblaw expects its cost of good on the regular selling unit to be equal to the unit cost of the Bonus Pack or Multipack.

4 In the Household and HABA category, Bonus Packs should carry a cost of good with a validated and logical economical scale reflecting the true efficiencies of the size and package. The Bonus product should have the same width and height as the regular item on shelf, so as to not infringe on other Suppliers shelf space. Multipacks (single unit products wrapped together) should carry a cost of good no greater than that of the additional cost required to package. Items in a Multipack must be made available in a single unit format. DRP AND DISPLAYERS Any items shipped to Loblaw that are Display Ready (DRP), displayers or special configuration of a normal in-line item, must have all discounts applied based on total Loblaw purchases. By way of example, a special pallet displayer of brand X shampoo that carries a special cost reduction of $.50/unit will have the $.50 deducted off of invoice on 100% of all the DRP s of the brand X shampoo shipped into any Loblaw facility (DC or store). DRP s must be created utilizing retail ready packaging. Criteria (i.e. standards of dimensions, price points, and assortment) for DRP and displayers are banner specific. DIRECT STORE DELIVERY (DSD) ADVANCED SHIPPING NOTICE (ASN) Loblaw expects each DSD supplier to use EDI 856 ASN for all shipments. Suppliers must accurately ship merchandise that matches with the quantity and items transmitted on the EDI 856 ASN. This policy sets out the repercussions should the shipments not conform with the EDI 856 ASN. The repercussions include cost recovery based fines, supplier funded audits, and removal from the ASN program (transition to verified DSD shipment or DC shipment) and ultimately, Loblaw s discontinuation of supplier. Loblaw audit results are final. Loblaw will be performing random audits of DSD ASN supplier shipments. The stores and suppliers audited will be randomly selected in the following manner o 4 weeks prior to the beginning of each Loblaw fiscal quarter the VP Shared Services will meet with each Loblaw Division and randomly select which stores will audit which suppliers o Suppliers will be randomly audited based on the volume of shipments. The audit of a delivery consists of the store performing a detailed count verification between the items physically shipped against the information sent through the EDI 856 ASN An audit of a delivery will be deemed a failure if one quantity and/or sku discrepancy error is discovered Supplier's driver must remain on site during receiving at supplier's cost Supplier delivery performance will be measured over Loblaw fiscal quarters and if o Less than 5% of audits fail the supplier will continue in the program o 5% or more of audits fail the supplier s ASN standing will go under review DEMOS Loblaw expects Suppliers to fund demonstration programs for their products in our stores. COUPONS Loblaw expects Suppliers to fund their products on our shelves through making coupons available to Loblaw. No shelf coupons are allowed in store except through our authorized methods, News Marketing Canada and Superstore Coupon Program. UNSALABLES Loblaw has adopted the Food & Consumer Products of Canada guidelines for managing unsalable and damaged products. Loblaw s expectation is that all vendors will support this initiative. Program user guide can be found at Insights/Unsaleables

5 STORE LEVEL ACTIVITIES (All Banners) Suppliers may not receive orders from stores unless specifically authorized by Loblaw Head Office. Suppliers may however issue credits to stores to help clear out stale or damaged product. No unauthorized merchandising materials are to be used in stores, including POS, Pre-packs, racks, coolers, contests, ballot boxes, characters, etc. No supplier gifts or incentives are to be given to store owners, managers or staff unless preapproved in writing from Head Office Suppliers may assist in planogram execution only with written approval from Loblaw Head Office. PROMOTIONS All promotional deals must be tailored to banner requirements as established by Loblaw. All promotional deals are to be entered on the Loblaw National Deal sheet form and are required to be submitted ten (10) to twelve (12) weeks prior to the promotion (including DRP s). Reminder promotion and shelf retails are at Loblaw discretion National Deal Sheet Pre-ship effective date Modification The National Deal Sheet (NDS) allows for a subsidy applicable to promotional inventory delivered to stores. Typically, the duration of the NDS covers the ad week along with a pre-shipment period of 7 days prior to ad. As we work to maximize efficiencies within the business, there are occurrences of promotional inventory billed/delivered to stores from the DC prior to the standard 7 day NDS pre-shipment date. As required, we will request that NDS duration be submitted with up to 14 days prior to the ad to ensure all promotional volume receives the agreed upon subsidy. NEW STORE/NEW DISTRIBUTION CENTER (DC) OPENINGS For a new store, renovation or DC opening, Loblaw will expect a volume discount of 10% off invoice from its Suppliers. This discount will help to cover a portion of the costs of initially stocking a store or DC with Supplier s product. This discount of 10% will be applied to all shipments pre-opening and two weeks post-opening. PC Optimum All Suppliers are expected to participate in LCL key strategic customer initiatives, including PC Optimum loyalty program. All Suppliers are to complete a vendor agreement and schedule to participate in the PC Optimum loyalty program, which outlines the amount of points purchased for mass & targeted audiences. If you require further details on any of the policies described above, including directions for submitting request or information to Loblaw as required by the policies, contact your Category Contact. Reminder Loblaw s Supplier Communication Guidelines (available on the Loblaw Vendor Portal or from your Category Contact) govern all your interactions with Loblaw. End notes 1 There are some exceptions to these policies permitted for commodity type products and products sourced offshore. 2 If over a 6 mos-1 year period of time, the cost of the commodity consistently declines, Supplier will provide a corresponding decrease in the cost of goods. 3 Exception: GNFR effective dates will fall on Monday thru Friday