Canada’s largest grocery chain is freezing prices on all No Name products for the next three months.
Loblaw Companies Ltd. says: — which operates grocery stores like Loblaws, Zehrs, No Frills and the Real Canadian Superstore — it has closed prices for the popular household brand, which includes more than 1,500 groceries, through Jan. 31, 2023.
In a message shared with some of its customers on Monday, Loblaw Chairman and CEO Galen J. Weston said the price of the average grocery basket is up about 10 percent this year, with the price of items like apples, soup and potato chips rising even more. .
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Much of this “crazy” is out of the company’s control, Weston said, as food suppliers pass higher costs on to Lublow.
He said the chain has rolled back some of the increases where possible, but that suppliers are facing the same cost increases as consumers — with higher prices for everything from raw materials to energy and transportation.
“None of these explanations offer much relief when you’re concerned about your family budget and unsure of how much you’ll need each month to pay for food,” Weston said in a letter to members of the company’s loyalty program, PC Optimum.
Last year, the fight saw prices rise briefly The company suspends the sale of Frito-Lay products in its storesbefore the two parties reach an agreement.
Grocery chains have been criticized for being excessively profitable at a time when consumers are stressed by rising inflation.
A few years ago, grocery chains including Loblaw, Sobeys, Metro and others gained a reputation with shoppers when Canada’s competition watchdog discovered they were Complicity in setting the price of bread and other baked goods for years.
Federal National Democratic Party leader Jagmeet Singh has made grocery store profits a rallying cry, noting that major Canadian chains have generated $2.3 billion in profits so far this year.
That’s how much grocery companies have made so far in 2022.
On Monday, Parliament was forced to hold a vote to investigate price gouging and food price cuts.
Help us pressure Justin Trudeau and Pierre Poilievre to do the same. https://t.co/4n10mrhPkH
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Loblaw’s profits have actually gone up recently, with the company revealing Net profit of $387 million in its most recent completed quarter. This is $12 million more than the same period last year and $121 million more than Same period in 2019, before the COVID-19 pandemic.
It’s a similar trend at Empire Co. , owner of Sobeys, who posted Net profit of $187 million In its last completed quarter. That was slightly down from $188 million in the same period of the year earlier but higher than $120 million in the same period before the pandemic.
Jim Stanford, an economist and director of research at the Center for Future Action, said that while many Canadian companies have attempted to portray themselves as victims of inflation, their financial results show that they are in fact contributing to it.
“Corporate profits are up along with consumer prices, and that’s not a coincidence,” he told CBC News in an interview Monday. “The evidence is clear that companies are doing much more than just passing on higher costs.”
As a percentage of Canada’s gross domestic product, he noted, corporate profits hit an all-time high of about 20 percent in the second quarter of this year. While other sectors — notably the energy sector — saw profits increase at a faster rate, Stanford said, groceries are clearly ahead.
“We should view this as a PR gesture from a company that you know is being considered now,” he said of LeBlow’s decision to freeze No Name’s prices.
Similar moves in other countries
Loblaw’s decision to freeze the brand’s prices for its signature yellow and black packaging follows similar advertisements by grocery stores in other countries.
In August, French supermarket chain Carrefour announced plans to freeze prices of about 100 of its home-branded products until November 30.
In June, Lidl’s US arm launched a summer price-cutting campaign to ease the inflationary burden on customers. The company said it lowered prices for more than 100 items in its stores in nine East Coast states through August.
“We’ve seen grocery stores voluntarily freeze prices across the G7 for a while,” said Sylvain Charlebois, professor of food distribution and food policy at Dalhousie University in Halifax. “It should have happened a long time ago in Canada.”
However, Charlebois said the No Name price freeze would provide much-needed relief to Canadians, adding that it would also help fix some of the image issues facing Canada’s top grocery stores.
“This is also a PR strategy…a lot of Canadians are blaming groceries for what’s happening with food price inflation,” he said. “Some of it is due…but a lot of that criticism is unfair because food prices can go up for a variety of reasons beyond the grocer’s control.”