Skip navigation

AG Seattle Introduces New Credit Allowances

SEATTLE -- Associated Grocers here said it plans to roll out new programs this month that will pay retailers specified rates for credit allowances and reclamation fees for unsaleables rather than case-by-case returns and payouts.

SEATTLE -- Associated Grocers here said it plans to roll out new programs this month that will pay retailers specified rates for credit allowances and reclamation fees for unsaleables rather than case-by-case returns and payouts. John Runyan, president and chief executive officer, said other wholesalers are testing similar programs for specific categories but AG will be the first in the U.S. to implement the programs for all departments. He said the programs are designed to reduce the cost of doing business for AG and its retail members. Credit allowances -- which will be applied to purchases in each department and reflected on each invoice -- will be based on a percentage of total purchases, ranging from 0.15% to 0.30% for all categories except produce, which will carry a higher allowance rate, Runyan said. Regarding reclamation fees, swell allowances from suppliers will be included in the retailers' cost of goods and paid on each order. AG's ultimate goal, Runyan said, is to convert all reclamation suppliers to paying a swell allowance. He said the company has already converted approximately 70% of Center Store sales volume to the program. -- Elliot Zwiebach