In the face of continued membership loss and decreasing relevance to the Canadian grocery industry, the Canadian Pallet Council’s (CPC) Board of Directors has resolved to conclude an orderly shutdown of the CPC, with a planned closure anticipated during the second quarter of 2015.
According to information at the CPC website, this decision has been very difficult. noting the changing market environment and most tellingly, the substantial loss of support and participation in the pallet exchange program. The most recent examples include planned withdrawal of major Canadian grocery retailers Sobeys and Metro. Additionally, the last few years have seen the entry of pallet rental provider PECO Pallet into the Canadian pallet rental market, one already dominated by CHEP.
Earlier this year the CPC reached out to its membership with respect to how the loss of distributor support would impact the organization. The associated survey asked members of the CPC:
- if the CPC would have value to them once the major grocery distributors left,
- whether they would be prepared to pay more to maintain the CPC,
- whether they intended to continue their memberships,
- and whether they would be prepared to join the board of directors.
The CPC received feedback from approximately one-half of members, with the vast majority of members responding indicated that without distributor support, the CPC would provide little value. Most members were not prepared to pay more in order to sustain the CPC. Over the last two months, CPC staff have worked with the survey data to project membership support and revenues following the departure of Sobeys and Metro.
CPC notes that while some members indicated they would continue to support of the CPC, this appears to be a very small cohort, one that would generate less than 10 percent of CPC’s traditional membership revenue. The substantially reduced participation in pallet exchange has also resulted in concerns about the very viability of the exchange model.
Additionally, the association notes, it has been unable to find members willing to join the board and lead a diminished and financially fragile CPC. Based upon this membership feedback, the corresponding projected revenues, and the resulting limitations to any ongoing CPC operation, the Board has determined that the CPC will no longer be able to provide its core value proposition to members.
After lengthy analysis of the situation, the Board of Directors has proposed to proceed with an orderly shutdown of the CPC in 2015, calling it an extremely difficult decision to reach. This course of direction will be reviewed with the membership at the Annual General Meeting (AGM) on October 8th, 2014. In the interim, the CPC will continue to operate while continuing to downsize and reduce services.
Later this year or early 2015 there will be a special meeting of the membership called to approve a resolution to dissolve the organization. Members will receive further notification in this regard.