Target seeks relief from suppliers

MISSISSAUGA, Ont. — Target Canada is leaning on suppliers to absorb some of its financial stress by adding a 2% price discount. In a letter obtained by Report on Business, Target announced to vendors the creation of the Target Canada Business Development Fund (BDF) to collect “an incremental 2% accrual against receipts at cost” beginning next March. The move follows a similar decision by Sobeys, which pressed suppliers for a 1% cut after closing its acquisition of Safeway last year. That request generated ill will among suppliers, which analysts predict will be repeated for Target. Martin Gooch, CEO of Value Chain Management, called the BDF a “double-barrel hit and a double-barrel shotgun,” noting that Target “isn’t giving [vendors] the volume” they need to raise the 2% difference.