Kim Furlong, President and CEO of Retail Council of Canada (Part 2), on Retail Crime, AI in Retail and Surveillance Pricing

Speaker A: Foreign. To the voice of retail. I'm Michael LeBlanc, NRF Top Retail Voice for 2026 and Rethink Retail 2026 Top Retail Expert. This podcast is produced in conjunction with Retail Council of Canada. This episode is brought to you by Connect Canada's Way to pay. Visit Connect CA to learn more. $9 billion. That's what retail crime costs Canadian retailers every year before a single dollar goes to prevention. Today, part two of my conversation with Kim Furlong, president and CEO of, uh, Retail Council of Canada. We follow the stolen goods from store shelves to export warehouses to online marketplaces and talk about what it will take at the legislative level to stop repeat offenders. Then its tariffs, trade and why Shein and TEMU get a free pass on de minimis. Kim also draws a hard line on AI and surveillance pricing on behalf of the industry. And if you're a retailer who isn't a Retail Council of Canada member, she has a message for you. Let's get into it. Let's move on from affordability. Let's move into some specific issues. I know that, um, and predated you arriving here, but did reach kind of a bit of a crescendo. Let's talk about loss prevention, retail crime, organized retail crime. Certainly nothing new to the retail retail sector, but there was a, A lot of things that needed to happen legislatively that we thought was very, very important. You've made, you've moved the ball. You've moved, uh, the ball down the field on that. There's probably a bit more work to do. But talk about, um, your. What you were hearing from the members when you arrived about retail crime, its nature and what we thought we. I mean, it's a society problem, not necessarily a retail problem. But at the same time we had something to say to the politicians and something to say to the people.

Speaker B: Yeah, I say it's a retail problem. And it's uh, and to your point, the society problem. It's where most people will find their first job. It's where you and me shop is. So the number of people that have been witness to a crime in store, it represents $9 billion in loss every year. And this does not include the amount of money that retailers put in prevention. This is just a loss. Um, two weeks into the job, first board meeting, unanimous. Kim, this is our biggest issue. It affects all of us, uh, like 14 board members, all of us. Like, you need to tackle this. And to your point, uh, certain things were in motion. But you know, to continue your, your analogy, uh, right. Just like, uh, Just take the ball and run with it. And C34 ended up passing. We did so much work. Matt Poirier, VP in, uh, Ottawa, in just changing that language.

Speaker A: Talk about C34 for, uh, the people who aren't familiar, what difference did it make, uh, in the legislation? What was the objective?

Speaker B: The objective was to ensure that the bill would address some of the biggest concern that we were hearing over and over. And they were as follows. This person robs me every week, but doesn't take enough from me to ever be convicted. If it's $5,000 or below, it's basically considered a petty crime. So I have someone who comes in regularly, the same person, repeat offender, and this person is feeling no consequences, actually. It is so, uh, rampant and in your face that it like. And imagine if something like that happened to your house and the police said, well, they didn't take enough.

Speaker A: Right.

Speaker B: And the same person comes into your house. And so what we wanted to do with that bill federally was to ensure that the language would, uh, modify that. And it did. We took away the word violent out of repeat offender to make sure that it would apply to the retail sector. And now all of the crimes that are committed by an individual are cumulative, so you can actually prosecute. And so there's much more in the bill, but for us, it was giving, uh, the crowns across the countries in the system the law that would enable them to prosecute. And the next step is the hardest because the system is overcrowded and busy and strained and doesn't have enough dollars. So the next. Do

Speaker A: I focus on the, uh, you know, the people screaming at me that their cars are stolen from their driveways, or do I focus on this? Right. But

Speaker B: that's a great example because as soon as the federal government and all the provinces got in Ottawa two and a half years ago and said car theft, asked to stop, and they sent the political signal to all of their provincial, uh, police forces, dedicated units to it, and put some teat behind it.

Speaker A: And the feds had a role at the docks too, because the cars were going somewhere. So it was really as in this issue as well. There's both the criminal code and there's provincial legislation. So it's a multi. It's a big issue politically. Right?

Speaker B: Yes. And so we've had some signals from the federal and all provinces, uh, and some are at different, uh, places in their journey, like somewhere. The premier and the justice minister in Manitoba, Rob Canoe, they've been on this front. He's

Speaker A: been a leader in,

Speaker B: yes, by far Leader.

Speaker A: Premier KANU has been a big, big, big, big leader.

Speaker B: His minister understands this. They've put the resources, they had, dedicated resources within their policing. And so we've had some great uh, efforts, uh, in British Columbia, the Retail Council is working closely. And I think one of the things that has surprised me and I'm most proud of this year is the work that we've done in creating these relationship with police forces. Because really what we want is what they want. We want them to have more money, we want them to have political masters say this is important and we want to do that. And we communicate that politically by saying if, if you think this belongs to your minister, the parliamentary secretary, you're wrong. This is your writing, this is your community. This is where you shop, this is where your kids, this

Speaker A: is where your kids go to work and have their first job. What do you want their lives to be?

Speaker B: And if you don't tackle it,

Speaker A: it just gets worse.

Speaker B: It will grow. We saw it in the byword market In Ottawa where McDonald's has left, Dollarama left. The only people that have stayed are Giant Tiger. And that's because it's their historical building,

Speaker A: it's their first store. That's right.

Speaker B: And there was a sense that they couldn't do anything about it until they realized that now is getting so out of hand that they had no choice. So what we say to people across the country is the resources provincially has to be there. There needs to be a dedicated unit, dedicated crown, and you need to work with retailers. And so we've done a lot of work. We're going to be in Quebec, uh, next month for contact security where we have I think 37 different units across the province that are going to be with us at that event in conversation with retailers

Speaker A: still tickets available, by the way. I bet

Speaker B: you're such a good marketer. Yes, of course. We would welcome anyone to join us, uh, because it matters, it matters to, for our retailers, their employees, the violence in store. I'm sure you saw Jamie, uh, Nilsson's piece

Speaker A: this week

Speaker B: from Patterson Food and uh, the imagery that was shared with me, the examples in my first year of what's happening in stores is unacceptable.

Speaker A: Unbelievable. It's unbelievable. And shout out, by the way, to the Peel police who have knocked up a bunch of great wins in my neck of the woods. I think the chief of police, uh, spoke at the RCC conference. So there's a connection I think. And Rui Rodriguez has a lot to, a lot of credit, uh, to him as uh, he's been just such a great catalyst for these things. It all has to move at the same time, right? You need Matt Poirier in Ottawa talking to the Feds. You need Greg talking, you know, in Victoria. And you need Brewery with the expertise and you with the overseeing it all to make it move as you think about what you can do next. So you've made. You've made some progress on the legislative front. One of the things the Americans have done, uh, is really focus on how money is made from the stolen goods. And we see that go a couple of ways. Peel police would tell us that, uh, you know, some of those products stolen from liquor stores is. Is, uh, extorted to restaurants, for example. So that's not, you know, that's one angle. But there are also online platforms where, uh, stolen, like a good that's stolen from a store is worthless until you can sell it. And we all know at this volume, 9 billion, it ain't being sold in trunks, in parking lots. It's being sold in other ways. How are you thinking about that?

Speaker B: So there's two things that are happening because of Pearson Airport. Uh, the goods stolen in Ontario are often for exports. And you see pictures of these warehouses where these goods are being stored. And you would think, Michael, this is a retailer's warehouse, the way that it's laid out. And it's all for export. And this is organized crime. We work with cbsa. It's very clear there are some international rings that operate within, uh, Canada, and Pearson plays a big role in that. Now, when you talk about the resale on platforms

Speaker A: domestically. Yeah,

Speaker B: the US has something called the Inform act. And we at RCC have been working, and we began those conversations when we did a national roundtable last year, um, with, uh, Ruby Sahota, who's the parliamentary secretary for this, her junior minister. And she understands this. You know, sometimes you sit down with a politician and they're feeding you lines. This woman knows the file, understands it. But it became clear that the federal government's jurisdiction over the ability to regulate platforms, um, was such that it was going to be difficult. So now we've turned our attention and we're working with three different provinces. Like, the team are trying to see, uh, which province. And for us, the work and, uh, the magic will be trying to get them to do the same thing. But to your point, the ease in which something can be stolen and resold with no accountability is, uh, when the US passed that legislation and imposed those penalty, you saw a huge impact

Speaker A: on

Speaker B: the.

Speaker A: Didn't stop It. But it was a huge, A huge speed bump. And I got to think, you know, players like Canada Post have a big role. Right. This stuff's being shipped and nobody knows how. Products are moving better in some ways than Canada Post, as you say. There's so many actors that need to come together to make these things, but

Speaker B: also not easy. Right. Like, if you're like small parcel. What's

Speaker A: the difference between a small thriving business and an organized crime ring who ships products across countries? On the surface, it's very hard to tell. Right.

Speaker B: But if you're advertising online, on Facebook, Marketplace,

Speaker A: and shout out to consumers, if that Canada goose jacket is $199 brand new, it's stolen. Yes. Like, I think there's also, I've always thought a consumer kind of impact to this is like, listen, this stuff is not cheap because it's a discount. It's cheap because it's stolen. We've dealt with that with counterfeits, for example, you know. You know, over and over again, same kind of thing. All right, let's move off of. As much as I like talking about it, actually, let's talk about, um, tariffs and free trade. We touched on it up top. You've got a particular expertise in it. So I can't think of anyone better, uh, to comment on where we all are now. When I talk to members, mostly, but not singularly, depends on who I talk to. They're less affected by the tariffs or the counterterroriffs themselves. They are. What they're uniformly worried about is its impact on consumers. Right. On consumer confidence and consumer spending that rolls up to affordability. So what's the latest from your perspective that you're hearing from the government about the situation we're in today as we sit here in October, October 1st. As we sit here today, we've got yesterday the, you know, our brewers, uh, M. Shout out to Moosehead in, uh, Saint John, New Brunswick, no longer can ship their product to America. So, you know, we got all kinds of complications. What's the latest and what's. What's on the top of a very tall pile in that category?

Speaker B: Yeah, well, you're right. On day like the. In the hours and days after the talks collapse and the tariffs, counter tariffs became part of, uh, our conversation. Our retailers had two, uh, specific worries. What it would do to the consumer and the, um,

Speaker A: we saw the Stoco layoffs last week, for example.

Speaker B: So domestically, what it does to the purchasing power of their consumer, uh, segment and the strength of the Canadian dollar. So the FX impact on this because you know, like, uh, you're buying these products and you want to have some sense of that delta and how it's going to hit your bottom line. And here's the beauty of the retail sector. This happens. You have inventory, you've got stuff on shelves. So it's not like it's impacting you in the moment. So you get your retailers to do their homework over the course of a couple weeks, three weeks, and then you realize, oh, there's impact and some of them, 20 million, 40 million and it growing. Right. So

Speaker A: big numbers.

Speaker B: So this is not inconsequential, interestingly, because of how it's happening, why it's happening, the tone behind it, the underlying um, sovereignty issues. Everyone has been very uh, has acted in solidarity. Like I've not had a conversation with the retailers where they're saying to me, kim, do something to change it. They know that we're in a period where the politics of it and the sovereignty, uh, issues that are attached to it is such that um, we need to all band together. My conversations with Melanie Jolie, the industry, I said Minister, have been the same thing. Right. Like we're all in this together. And so we're talking about buying Canadian, we're talking about retailers making sure that their suppliers are as Canadian as they can be. And I'm explaining to her that's always the effort and that's always the intent of our.

Speaker A: If you happen to be an international retailer, perhaps you're American based, that you employ and hire many different tens of thousands of Canadians and give people their jobs and are a big contributor to the economy. Right. So we, we have members on both sides, as we say retailers in Canada. There's, there's.

Speaker B: But there's also. Michael. And go back to the uh, affordability issue.

Speaker A: Yeah. Number one.

Speaker B: Well, it comes back all the time. And so we're saying to the federal government and I hope this will be in the incoming budget because it's been on their list of to do's for at least a year. Plus de minimis. Sheen and Temu.

Speaker A: Yeah,

Speaker B: companies operating in Canada that have no regulatory oversight, no burden in terms of uh, having brick and mortar, as you said, employing people being here often not meeting the requirements that Health Canada has put on products. Labor

Speaker A: exploding batteries to Canada. Um, you know, are you confident or what's your level of confidence? Uh, you know, the US eliminated their de minimis and there's a lot of collateral damage to that. Like they wanted to go after these, what I call landfill direct companies, um, which they did. Uh, but they also sideswiped a bunch of other business. I mean, de minimis existed for a reason, right? It was like the smooth commerce for small inconsequential things. You know, I want to send a package to Aunt Margaret and I don't want to fill out a bunch of paperwork. So do you have any confidence or what's your perspective around being able to stick handle de minimis so that it gets rid of the bad actors but doesn't sideswipe the good actors? Uh, could include the members.

Speaker B: And we've had conversations with finance officials around, like how to do this and how to, to do it in a way that, to your point, does not create gridlock when it comes to these small movement of parcels. That being said, uh, it was a topic at the table for the G8 summit when Canada was host. They tabled it. Most of the G8 summits of G8, G7 nations have moved, but Canada is yet to move. And like, you want people to support the Canadian economy, then you have to like. And you're saying, okay, well Kim, it's coming cheaper from Shin and Timu. Well, I'd rather you give it to Dollarama. At least they're hiring people. Uh, they've got stores, they're part of community. They, they support charities. They're, they're here. And so if you had to choose as a Canadian consumer, go to Canadian Tire, go to La Arma, go to Giant Tiger if you want to operate in that price point, but at least support your community.

Speaker A: Abandoned carts and chargebacks are costly for Canadian retailers selling online. Today's shoppers want more than convenience. They expect trust. Connect delivers that. Powered by Interac and backed by Canada's leading banks, Connect is a digital wallet that gives shoppers more ways to pay participating merchants. With Connect, Canadians can make fast and secure payments with an eligible credit card or with debit directly from a checking or savings account at, uh, participating financial institutions. Connect Canada's way to pay. Visit Connect CA to learn more. Let's talk about AI and technology. Uh, it has um, a bit of a political flashpoint I thought. Uh, this week Walmart, uh, put a big statement out that I thought no one has said it better, right? We price the. Wouldn't he say? We price the product, not the

Speaker B: person.

Speaker A: Not the person. I think that encapsulated and you've done posts about this. Um, we've seen Manitoba, Ontario's talked about it, even Toronto has talked about this. AI, surveillance, pricing. It's all typically confused conversation, but it's happening everywhere. AI I think, creates flashpoints. Uh, my perspective around AI and consumers is it people think whether I want AI or not, it's going to be done to me and therefore I don't have any agency. So it's all wrapped up in that kind of that vibe, so to speak. But, um, as you think about the members and let's talk about surveillance pricing and AI the good, bad and the indifferent parts, what are you hearing from the members?

Speaker B: It was so interesting as this word surveillance pricing came to be part of our, uh, news coverage and governments and we're going to ban this and we're going to. Something

Speaker A: was everywhere. Everybody was talking about surveillance pricing. Where did that come from?

Speaker B: Well, it came from Instacart in the US Toying with it, being caught very rapidly and then moving away from the practice. So I think the first thing

Speaker A: you Instacart.

Speaker B: Well, you know what? Thank you. No, thank you. I

Speaker A: know you're. I know you're a partner some of our members. But, but

Speaker B: I say, I say thank you because the potential of this exists as this technology unfolds as we have the tool as retailers like algorithmic pricing and the surveillance pricing are, are two different things.

Speaker A: Yeah.

Speaker B: The use of data to decide at uh, what price you're going to sell something is as old as retail itself,

Speaker A: just like John Furniture said. That's why I think it captured it so well. We're going to use very sophisticated tools to manage our price and give you the best value but not cross that.

Speaker B: Yes.

Speaker A: That stream. There's nothing new about it. I mean I was running all the programs 20,

Speaker B: uh, as we look at the new pipette like privacy legislation that we're working on, like there's a lot of conversations that the council is having with Ottawa and, and our members to modernize that framework and, and understand that the use of data and I. You'll see we have some new data that we're going to publish in the next week or so on uh, loyalty and how Canadians, they link loyalty to affordability, their ability to do the points and to they. If you took that away from them. But in order to do loyalty you need algorithms, you need data, you need preferences, you need to, to have these offers that are, that are specialized for that individual and are relevant to them, relevant to the consumer. Now when you think about surveillance pricing. Surveillance pricing says you, Michael, because you roll in the big bucks, you know, like you're a successful man.

Speaker A: Their algorithms are wrong right there.

Speaker B: There you go. Like you're walking, you know, they Know where you live, they know your postal code, they know what you drive, they know what kind of credit card you have because you are who you are and you, they believe you to have a higher income. The price would change for you.

Speaker A: Right?

Speaker B: And that's not happening. And you saw it from the CEO, the global CEO of uh, Walmart this week. And for something like that to come from the office of the CEO to take it tells you how much distrust

Speaker A: now

Speaker B: politicians have been putting in the mind of consumers. Because this started with politicians saying, we're going to stop this. And so, well,

Speaker A: it started the politicians saying this is a vote winner.

Speaker B: Yes, uh,

Speaker A: issue.

Speaker B: It's because there's true

Speaker A: or not true.

Speaker B: There's so little that they can do to tackle the affordability. They say, you know what, we're going to stop all these retailers from doing this to you. And what the first thing that we did at the council is have one on one conversations with all of our members. Are you doing this? We're going to take a position. Are you doing this? This is important. We need to understand like what your practices are time and time again. They're like, kim, why would we do that? If we did that, we would basically lose the trust of our clientele. And it's such a competitive landscape. We would never take that risk. Ever take that risk. So the council was very clear. We came out with a very strong position that we were against surveillance pricing.

Speaker A: By the way, when you said pipa, I had a sharp pain in my head because I lived through the first generation of pipitas. Thanks for that. That resonating headache that pipeta was, God bless it, you know, privacy and all that stuff. Do you see a code being developed? I mean, in our past there has been a code for pricing errors that retailers, uh, volunteer to adhere to. There's also, uh, there's a code within the grocery industry. Do you see it going to be a code which typically is a great way to say, listen, we don't need legislation, don't think about legislation. We're going to, you know, we're going to manage this ourselves. We don't want to do it. Is a code a solution? Uh, are we still kind of thinking about what's the next best step beyond awareness?

Speaker B: So I'm in Ottawa next week. We'll be sitting down with the Deputy minister who serves Minister Solomon, uh, to have this conversation. I'm trying to get to Minister Solomon. I heard him speak a few months ago and everything that he said was, uh, was balanced. Like, I don't think that he's, uh, he's part of the, the group who has, uh, some fear attached to his messaging. Um, I think the first conversation that we need to have is what kind of language do we put around a framework that sends a signal to retailers as to, you know, what's acceptable? Because here's the thing, you could do it.

Speaker A: The technology exists, it's getting faster and it's getting better.

Speaker B: And Instacart tried it, so would someone. And

Speaker A: by the way, there's lots of other villains in this narrative beyond the retail industry. Uh,

Speaker B: so to me, it's, you know, all of our retailers are saying, kim, we would never do this because of that trust issue. And, uh, if we even ventured in that area, uh, it could be the end of our brand. So let's put some guardrails, let's put some signals. Could we get to a code? This is just another layer. But I think the conversation that we need to have is one that is really open and we need to educate people. That algorithm and surveillance when it comes to pricing is very different. And everyone that runs a business uses data to make decisions, and that's algorithmic. Your the use of data to make. And even like in that conversation, you had people saying, uh, electronic shelf labeling. Like you're going to walk down the aisle and the price is going to change for you because it's going to know how much. And so you know those fears within the consumer at a, at a time. And again, when you were saying what keeps you up at night? Affordability, like it is. All of these issues, Michael, are all tied in to how people are living today and the amount of money they have, the trust that they have, like the. This technology that's being. And

Speaker A: their reputation of the industry. Right. It becomes a big reputational industry. Are we doing everything we can as an industry to make it affordable for Canadians? And

Speaker B: yes, you

Speaker A: know, it ties very deeply and it ties very deeply to the mission that you have, which is reputation and managing legislation to reduce costs and all those things. Right.

Speaker B: But flip it on its head at the same time that people are worried and have this lingering feeling that someone could mispriced. They have in their palm of their hands the most powerful tool to figure out where the best price is. And so every customer could be like, I will keep these retailers on their toes. And the agility that you spoke about earlier in terms of operation will have to also be on pricing because the consumer knows.

Speaker A: Yeah, what a time. What a time. Last question for you. Let's talk business. You know, Retail Council Canada is you, uh, volunteer, so to speak, to join you. It's not mandated that retailers need to join the Retail Council of Canada. There's membership and there's benefits, uh, and there's fees and all those things for retailers listening who may not currently be a member of Retail Council Canada, why should they join?

Speaker B: Well, let me, I'll answer that by talking to you at a really high level really quickly. Let's say we're going five or six floors elevator. Right? My Strat plan, it has three pillars. The first one is how we show up in people's mailbox, how we show up the Council. You do our retail condition report. It's only available to our members. Deep insights as to what we're seeing in the quarter. We have Moneros data, we have Environics foot traffic data, we have Stat Scan. And so this idea that like, under the council as a business, you could have all the resources to understand where you fit in, how you operate and like really put yourself in context. And my job and the job of the team will be how we show up in a very personalized, specific way for our different segments or different people. I've done a lot of CEO roundtables talking about the K Shape economy, talking about Kuzma, uh, talking about what's happening in the Middle East. So if you're a CEO out there and it's very lonely, like you want to be with your peers, having conversations and getting insights and conversations. So that's the first reason why you should be part of the Council. The second one is when you think about that, um, reputational pillar, this number two and what we're trying to do in terms of how people perceive us, you need to help fuel these efforts. So if we all put our dollars together behind RCC and do this, not only are we going to be part of bigger policy conversation and affecting the way that our business, uh, is impacted by regulatory burden. Different things, but talent. Don't you want the next generation to say this is the most dynamic sector? It has all these global headquarters located here. As I finish business school, this is where I'm going. And it's because the perception of the industry is such that it is highly attractive, highly competitive, high adopter of technology in a place where, you know, anyone who's accidentally fallen into this industry has grown to be like filling shelves to CEOs, right? So the ability to grow in the industry is such that it's a perfect place for someone to, uh, think strategically about their career and, and the Last pillar is what we do best. It's our bread and butter. And I'm a lobbyist. Like, I'm not a professional association person. I am someone who understands the wheels of governments, how decisions are made. I have the privilege of working with a team that is extremely, extremely capable from coast to coast. We are the concierge, we are the firefighter. We are the group of people that if an issue comes up in your business, you call us and, and we will walk you through it. We will advocate for you, we will push the issues, uh, and we have big wins and we don't do enough to uh, communicate them. And as we said earlier, maybe I'll be spending a little bit more time with you on this podcast to talk about this

Speaker A: pile of fun. Now one last question about that. For the retail and as you know, I worked, uh, in membership here and for the retailers that say that don't belong and say, well, you're going to do all that work anyway. I'm going to be a beneficiary. Why should I join? Why should I spend money with Retail Council of Canada? What would you say?

Speaker B: Well, your team is stronger from being connected to us. Think about the loss prevention. If you are a retailer out there and you're not part of our organization, I know for a fact that you're dealing with these issues. You're not connected to all these police, uh, these police organizations across the country. You're not part of a network of people that are sharing information. We do work on cybersecurity. Like this is an issue that is like growing and like the retail industry is a target. If you're our marketing professional, if you're an HR professional. We're just about to reignite the legal counsel, uh, group where we're going to have four law firms work with us once a quarter to do an in person and virtual meeting where we're going to tackle big issues. So it brings. So if you're CEO of a retail organization, you think, uh, ah, they're just going to do this, like, I don't need to do it. I would say to you, your team is weaker for not being part of this organization because we support different people in the different pillar of your organization to be better at their job, have better insights, better connected, better outcomes.

Speaker A: What a great way to wrap the show. Listen, it's been great talking to you. I hope we can do it many, many times again. And as you said, I think that we got to uh, have had the opportunity to communicate a lot of great things. It feels like you've been here many, many years already. Uh, as you prepare for, uh, next year, congratulations on all your success for you and the team and wish uh, you, on behalf of uh, the industry and everyone else, much continued success in 2027 and beyond.

Speaker B: Appreciate it. Thanks

Speaker A: for joining me on the

Speaker B: pod.

Speaker A: Thanks for tuning in. If you like this episode, give it a five star review and share with friends and colleagues in the retail industry. I'm Michael LeBlanc, award winning media Entrepreneur and Senior Retail Advisor. You can learn more about me on LinkedIn and be sure and tune in to the award winning, remarkable Retail podcast with my partner Steve Dennis and my Global e Commerce Leaders podcast with my partner Jim Okamura. Safe travels everyone. Hm. Ra.