One of North America’s largest supermarket chains has bluntly told its suppliers they will not accept increased prices related to Trump-imposed tariffs.
Albertsons, which operates more than 2,200 supermarkets and is the second-biggest grocery chain in the continent, drew a hard line with it suppliers last month.
The Idaho-based company – which also runs stores including Balducci’s, Kings and Safeway – sternly declared they will not tolerate any unauthorized price spikes.
‘To maintain transparency and ensure consistency across our supply chain, we are writing to clarify our Company’s policy regarding how these tariffs should be handled in our ongoing partnership, Albertsons wrote in a letter obtained by BIG.
‘Our customers rely on us for our competitive pricing and quality products, and we are committed to maintaining the value proposition our customers expect.’
Albertsons acknowledged that hiked-up foreign taxes may put pressure on many businesses, but suppliers are not to include tariff-related fees in their invoices without the chain’s approval.
‘Therefore, with few exceptions, we are not accepting cost increases due to tariffs,’ the message reads.
The company explained that if a supplier absolutely must increase their costs, they have to provide at least 90 days notice before billing Albertsons any differently.
Vivek Sankaran (pictured), Albertsons current CEO, is set to retire effective May 1. Albertsons is the second-largest grocery chain in the continent
President Donald Trump (pictured) has imposed strict trade tariffs on every nation, which Albertsons said cannot be used as an excuse for suppliers to increase prices
Suppliers must also provide valid proof that tariffs really are increasing the price of their products.
Albertsons will then look over the request, which could take another month before it gets okayed or denied.
President Donald Trump has placed a temporary pause on his previously imposed reciprocal tariffs and given most nations until the beginning of July to work out new trade policies with America.
But there is still a universal 10 percent tariff rate on almost every good being imported into the US.
He has also imposed 25 percent tariffs on automotive parts and vehicles, as well as on steel and aluminum.
Mexico and Canada have been hit with a 25 percent tax on most goods coming into the US, except those covered under the United States-Mexico-Canada Agreement.
China has been slammed with the heftiest tax of all – a 145 percent rate with hardly any exceptions.
With the unavoidable nature of these tariffs, American Economic Liberties Project researcher Matt Stoller believes Albertsons’ plan is too idealistic and the letter was arrogant.
Albertsons (pictured) operates more than 2,200 supermarkets across North America including Kings and Safeway
American Economic Liberties Project researcher Matt Stoller believes Albertsons’ plan is too idealistic and the letter was arrogant (pictured: the inside of an Albertsons in Washington)
‘That’s absurd, since the cost of many items is going to spike, and suppliers will go out of business if they can’t cover those increased costs,’ Stoller wrote in the BIG newsletter.
‘Yet, the arrogance speaks to the power of buyers like Albertsons. And Albertsons is nothing compared to Walmart or Amazon.’
Vivek Sankaran, Albertsons current CEO, is set to retire effective May 1 – just days away – according to a company press release.
He will be replaced by Executive Vice President and Chief Operations Officer Susan Morris.
‘It has been a privilege to lead Albertsons Cos. through a critical period of evolution and I couldn’t be more confident in the Company’s future with Susan at the helm,’ Sankaran said when he announced his retirement in March.
According to the company, keeping food affordable for its customers has always been a top priority.
‘The Company is committed to helping people across the country live better lives by making a meaningful difference, neighborhood by neighborhood,’ a March press release reads.
Albertsons had previously tried to position itself to be a strong competitor against the grocer giants Stoller mentioned, such as Costco and Walmart, by merging with Kroger.
The Idaho-based company sternly declared they will not tolerate any unauthorized price spikes in a letter sent to suppliers last month
However, this grand plan fell through last year because of legal hurdles and regulatory concerns brought up by the Federal Trade Commission (FTC) and state attorney generals.
The FTC claimed: ‘Kroger and Albertsons’s inadequate divestiture proposal is a hodgepodge of unconnected stores, banners, brands, and other assets that Kroger’s antitrust lawyers have cobbled together and falls far short of mitigating the lost competition between Kroger and Albertsons.’
The commission believed the merger would eliminate competition and be detrimental for the grocery chain industry.
