American pet store chain harms Canadian suppliers with new payment terms

Pet Valu, who has more than 700 stores across Canada and the U.S., has chosen to delay payment terms to their suppliers, switching to 120 day terms.

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Nico Johnson Montreal QC
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The multi-national corporation Pet Valu, who has more than 700 stores across Canada and the U.S., has chosen to delay payment terms to their suppliers, switching to 120 day terms.

This will cause some considerable harm to Pet Valu’s Canadian suppliers. Speaking to The Post Millennial on the condition of anonymity, multiple Canadian-based suppliers said Pet Valu’s decision would significantly harm their businesses—going as far as to say that they would have to lay off staff or shut down their operations.

As well as this, a supplier to Pet Valu stated that the only feasible way to escape the economic strain of this delay in payment is to increase their selling prices, meaning the Canadian consumer will have to pay more for the same product.

Many of the sources that The Post Millennial spoke to expressed concern that Pet Valu would cut their relationship with them if they spoke publicly about this matter. This is especially the case for suppliers who have Pet Valu as their largest customer, meaning they simply cannot afford to have a fight.

In a letter obtained by The Post Millennial, Pet Valu VP’s told their suppliers that they “require [their] support in this fluid and challenging time.”

“As such, we are immediately and temporarily extending payment terms to Net 120 days on all existing payables and future orders. We recognize and appreciate the challenges that this decision may have on our business partners.”

Financial analyst Sasha Zaroubin expressed confusion over Pet Valu’s decision. “Pet Valu seems to be in a better condition than most to weather the economic impact of coronavirus,” he said. “They are considered by the Canadian government to be an essential business, and are thus less affected by the lockdown.”

Another Toronto-based pet store owner told The Post Millennial that they don’t expect their sales to decrease dramatically over the next few months, making it unclear why Pet Valu chose to extend their payments.

Pet Valu is owned by Roark Capital, which is based in the United States. Roark Capital also owns a series of gyms and restaurants. Due to the pandemic lockdown, these businesses may be struggling, whereas Pet Valu remains relatively untouched due to its “essential business” status.

In response to The Post Millennial’s request for a comment, Pet Valu said “the COVID-19 pandemic, and the resulting self-isolation and social distancing, has created some tough challenges for large and small businesses.”

“As the situation continues to be extremely fluid, Pet Valu, like many other retailers, has asked our partners and suppliers to work with us to make some temporary changes. These changes will ensure Pet Valu can continue to support our employees, stores and suppliers and serve our devoted pet parents for years to come. This is a difficult and unprecedented situation for everyone and we are deeply appreciative of the support we are receiving from our partners and suppliers,” the company added.

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