Loblaw Chief Financial Officer provides
commentary on food inflation
BRAMPTON, ON, March 21,
2024 /CNW/ - As Canada's recent inflation numbers
continue to show positive momentum, Loblaw Companies Limited's
(TSX: L) ("Loblaw") Chief Financial Officer, Richard Dufresne, provides commentary on the
trends shaping food prices in Canada:
"According to the most recent data, inflation in Canada declined once again to 2.8% in
February. Notably, food inflation (from food bought at stores) is
now sitting at 2.4%, the lowest it has been since July 2021, and the first time it's been lower
than overall inflation since October
2021. For Canadians who continue to face extraordinarily
higher costs of living, this is good news, and signs point to
continued moderation in future months.
Chart 1. Price growth for food purchased from
stores slows below headline Consumer Price Index (CPI)
After four decades where the average grocery inflation rate was
about 3%, in the past two years grocery inflation has averaged
nearly 9% - levels unheard of in a generation. In recent years, a
confluence of global forces has been at play leading to increased
prices globally and in some cases, limited products. These
include geopolitical instability in Europe, supply chain backups from COVID,
extreme weather events (particularly in key growing regions),
labour challenges, higher energy costs and, specific to Canadian
prices, a weak Canadian dollar compared to the United States.
We are starting to see supply chains recover, a stabilization –
and in some cases reduction - in commodity prices and shipping
costs beginning to return to pre-pandemic rates, key factors in
overall food pricing. Food cost increases from suppliers are
starting to slow, and while some proposed increases remain above
inflation, the reductions are encouraging.
An interesting example is Margarine, where prices were lower
last month than in January. In this example, vegetable oil prices
have retreated from their peak and we've seen favourable harvest
conditions for soybeans in South
America. Through our private label brands, we have passed
down these savings to customers.
For our part, Loblaw's ongoing efforts to lower food prices
continues to benefit Canadians. Our internal inflation rate in
February was materially lower than CPI food inflation. A few
examples of this work include:
- Optimizing the company's store network to include more discount
locations, opening 31 new Maxi and No Frills stores in the past
year, and planning to open at least 40 more in 2024. These stores
save customers approximately 15% compared to conventional grocery
stores, and will reach 1.8 million more Canadians
- Introducing new promotions, including the innovative Hit of the
Month campaign, which brings aggressive prices on key products
across the company's entire store network
- Providing deeper discounts on 35 everyday items, ensuring that
products that matter the most to Canadians are available at an
average of approximately 30% off regular prices
As a company, our purpose is to help Canadians live life well,
and making good food more affordable and accessible is one of the
most important ways we can do that. We're turning over every stone
in our efforts – lowering prices, increasing points offers and
making meaningful changes to our business to help customers save
money in our stores."
About Loblaw Companies
Limited
Loblaw is Canada's food and
pharmacy leader, and the nation's largest retailer. Loblaw provides
Canadians with grocery, pharmacy, health and beauty, apparel,
general merchandise, financial services and wireless mobile
products and services. With more than 2,500 corporate franchised
and Associate-owned locations, Loblaw, its franchisees and
Associate-owners employ more than 220,000 full- and part-time
employees, making it one of Canada's largest private sector employers.
Loblaw's purpose – Live Life Well® – puts first the
needs and well-being of Canadians who make one billion transactions
annually in the company's stores. Loblaw is positioned to meet and
exceed those needs in many ways: convenient locations; more than
1,100 grocery stores that span the value spectrum from discount to
specialty; full-service pharmacies at nearly 1,400 Shoppers Drug
Mart® and Pharmaprix® locations and close to
500 Loblaw locations; PC Financial® services;
Joe Fresh® fashion and
family apparel; and four of Canada's top-consumer brands in Life
Brand®, Farmer's MarketTM, no
name® and President's Choice®. For more
information, visit Loblaw's website at www.loblaw.ca and Loblaw's
issuer profile at www.sedarplus.ca.
SOURCE Loblaw Companies Limited - Public Relations