Loblaw’s on a three-month-long “price freeze” no name The products were stockpiled on Tuesday as one of its main rivals warned that cost increases were coming to line store shelves.
As Canadians faced higher prices at the supermarket due to decades of high inflation, Loblaw announced on 17 October2022, that it was locking in the prices of its in-house brands till January 31, 2023.
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The move drew praise from the then finance minister, Chrystia Freeland, who called it a “great decision”. NDP leader Jagmeet Singh, who has called “greed” behind the high grocery bills, called Loblaw’s price hike a “positive step” at the time, but said the grocer “could have acted a lot sooner.”
However, overall inflation While prices appear to be falling, the price stabilization comes at a time when Canadian food prices are still higher than overall inflation, according to Statistics Canada December 2022 Report,
“During the price freeze, Canadians saved hundreds of millions of dollars by choosing No Name over big-name brands. Meanwhile, food inflation has continued and the cost of stocking our shelves has increased month-on-month,” a spokesperson for Loblaw told Global News in an email on Monday.
“The over three-month price freeze expires on 31 January – but we are not done. Looking forward, we will continue to keep those prices stable wherever possible, and switching to No Name will allow us to average The family will be saving thousands.
The spokesperson did not respond to follow-up questions from Global News by deadline on whether the price freeze could be extended again.
At the time of the price freeze announcement, Loblaw’s main rivals Metro said it was not unusual for grocers. to keep prices during the holiday season. In return, Metro said it would not accept cost increases from its suppliers during the holidays for its private-label brands and national brand products between November 2022 and February 5, 2023.
Metro CEO Eric La Fleche said in a Jan. 24 earnings call that the grocer is receiving a “significant number” of requests for cost increases from its vendors, and that price changes will be coming.
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“We have had good talks with our vendors to manage this, reduce and control the rate of increase because we want to protect those customers and protect retail pricing – but the increase is coming ,” They said.
“The root causes of food inflation around the world are still there, and we have to accept some of this increase. Hopefully we will manage to bring it down as much as possible. I will remain competitive.
In its December 2022 report, Statcan said the annual rate of inflation declined to 6.3 percent in December from 6.8 percent in November. This was the biggest decline in inflation on a monthly basis since April 2020. However, inflation still remains above the Bank of Canada’s target rate of two per cent.
Grocery store food prices rose 11 percent in the month, down slightly from 11.4 percent the previous month.
While StatCan recorded slower price growth among staples such as bakery products (13.5 percent versus 15.5 percent in November) and coffee and tea (13.2 percent versus 16.8 percent in November), the agency said that pressures remained in December. On fresh vegetables, prices rose by 13.6 per cent last month as compared to 11.7 per cent in November.
Tomato prices were higher by 21.9 per cent year-on-year in December. Statcan attributed the increase to inclement weather in the growing regions.
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Canada’s big grocers have come under fire for months as many chains continue to post strong profits while consumers deal with higher prices amid persistent inflation.
The Bank of Canada, which raised its key interest rate seven times last year in a bid to tame inflation, did it again last weekBut signaled a pause in rate hikes is coming.
However, the hold is “conditional” on whether the economy continues to develop as per its forecast, Governor Tiff McCallum said on Jan. 25.
Canada’s economy grew by 0.1 percent in November. Statcan said on Tuesday.
The Bank of Canada said on January 25 that it expected inflation to “decline significantly” in the coming months, reaching three per cent by mid-2023 before reaching its target of two per cent next year.
Canadians will know how inflation was in January when StatCan releases its report for the month on February 21,
With files from Global News. Craig Lord and The Canadian Press
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