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Coming into Focus: CPC Loses Even More Support In the Grocery Sector
CPC Losing Ground: As more retail partners decide to opt out of pallet exchange, the future of the CPC becomes even more in doubt. Find out the latest developments.
Date Posted: 6/1/2014
PECO Pallet Receives Walmart Canada Approval
AS the CPC looses retail partners, pallet rental companies gain ground in Canadian market.
After losing the largest grocery retailer in Canada last year, the Canadian Pallet Council (CPC), a cooperative grocery industry pool in Canada, is now teetering on the edge of irrelevance as more retailers jump ship and put the future of the program in jeopardy.
Last year Loblaw withdrew from participating in pallet exchange. In response, the CPC management team cut costs and put together a new management plant to deal with the changing retail landscape. But the CPC has struggled to make this plan work due to a number of factors including: changes in retail partner collaboration, reduction in pallet volumes, continued repair and logistics challenges, etc.
The CPC recently stated that the fate of the organization depends on support from retailers continuing to participate in pallet exchange as well as members paying dues. President of the CPC, Belinda Junkin, said, “The CPC’s new plan has not been implemented due to uncertainty as to whether there is sufficient member support.”
The CPC leadership has learned that Sobeys is planning on withdrawing from the exchange program by the end of 2014. It expects to follow an orderly exit process to satisfy any pallet imbalances. Safeway Canada which was acquired by Sobeys in 2013 will follow the same course as Sobeys. Shoppers Drug Mart, which have been acquired by Loblaw, anticipates that it will shortly be adopting the same policy as Loblaw. Finally, Metro Inc. (Ontario and Quebec) will continue to participate in the exchange program at least until October 2014, at which time it will reconsider its position.
All of these moves mean that even fewer retailers are going to participate in the CPC. When you consider that PECO Pallet is starting to gain some ground in Canada, it appears that it is only a matter of time before the CPC goes out of business or at the very least significantly revamps its operations.
PECO Pallet, Inc. recently announced that the company has been approved as a pallet participant of Walmart Canada, giving vendors the option to utilize PECO’s wooden block pallets when shipping into Walmart Canada locations.
Junkin acknowledged, “Many large distributors will no longer be liable for pallet imbalances and may not exchange CPC pallets at the time of delivery. We do not interpret this to mean that CPCs will not continue to be accepted, however the CPC is a pallet exchange program and it will not continue to operate as it has at many of the large distributors. There can be no doubt that the withdrawal of so many distributor members will have a significant impact on the utility of the program.”