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CBC
12-03-2025
- Business
- CBC
Buying Canadian is a matter of pride for shoppers. For major grocery chains, it's an opportunity
Social Sharing The Buy Canadian movement has arrived in the country's major grocery stores. You've probably noticed labels with bright red maple leafs, prominent displays stacked with Canadian products or promotional flyers that tout homegrown items. "All the best things have always been made here. All we had to do was look," proclaimed a recent Buy Canadian-themed commercial from supermarket giant Sobeys, one of several supermarket giants trying to prove its Canadian bona fides to consumers amid a tariff war with the U.S. Shoppers just want it to be easy to find Canadian products right now, and some are willing to scour labels or seek out the items themselves — but that could get old, quick, said Tandy Thomas, an associate professor of marketing at Queen's University. Grocery stores to the rescue: "That is going to be imperative to the longevity of this," she said. "Because if it is hard, if every decision requires three minutes in the grocery aisle to really try and decipher the labels, consumers won't be able to do that. It's too big of an ask." The country's major food retailers have all rolled out new marketing strategies in recent weeks to meet a newfound demand for Canadian products — and with price hikes in play, they're betting on a reputational reset after years of contention between shoppers and consumers came to a boiling point last year. Loblaws priming shoppers for tariff price hikes Loblaws is priming its shoppers for pricier groceries as the trade war plays out, announcing this week it will add a triangular "T" label to store items that it says will be costlier due to tariffs. As soon as the tariff goes, so will the price hike, according to the company's website. CEO Per Bank explained in a LinkedIn post last week the company would be doing more to highlight Canadian products in-store, in promotions and on flyers, and that shoppers would have the option of swapping an item for a Canadian-made version in PC Express, the company's online delivery platform. The company is also "offering points for Canadian products," but it's unclear if those products now qualify for a higher PC Optimum points reward than they did previously. CBC News reached out to Loblaws for an interview and a statement and did not hear back. Spokespeople for Sobeys (which shares parent company Empire with FreshCo, Safeway and IGA) and Metro did not grant CBC News an interview, but said they were putting more effort into highlighting local and Canadian products and making them more visible to customers in-store, online and in marketing material. But they're not always getting it right. A recent CBC News investigation found a Sobeys in Nova Scotia had labelled its house brand maple syrup with a red maple leaf, but hadn't done the same for other Canadian maple syrup brands. The same investigation found other discrepancies, like a maple leaf on products by brands owned by foreign companies, but not on brands wholly owned in Canada. WATCH | U.S.-made items with Canadian maple leaf perplex shopper: U.S.-made items with maple leaf symbols perplex pro-Canada shopper 5 days ago Duration 2:21 The Canadian Food Inspection Agency told CBC News in an email it had seen "an increase in complaints related to country of origin claims on food labels or in advertisements" over the past month, indicating some savvy shoppers have become more conscious of labelling mishaps. After a total of five complaints made between November and January, 23 complaints were made in February alone. A spokesperson for the agency, which regulates food safety and labelling, said it's reviewing the complaints but that it's too early to tell if any of them violate Canada's food laws. A reputational reset after summer boycotts Some retailers are probably relieved they'll get a break from being the subject of consumer anger after inflation-induced boycotts were directed at Loblaws, Sobeys and Metro last summer, said Tim Dewhirst, a professor and senior research fellow in marketing public policy at the Gordon S. Lang School of Business and Economics at the University of Guelph. The Buy Canadian movement represents an opportunity for major grocers "to be seen as good corporate citizens," he said, especially as focus shifts — for some, but not all — from one boycott to another. "In a lot of ways, people's anger has been diffused or redirected towards American brands, but more in particular, the decisions and threats coming from President [Donald] Trump and his administration," he said. But Dewhirst also pointed out consumers have a long memory. When inflation was soaring two years ago, shoppers accused major grocers of price-gouging during an affordability crisis. Their executives denied it, but experts told CBC News at the time inflation would give them cover to hike retail prices. Several readers have written to CBC News recently saying they're concerned that grocery retailers will capitalize on tariff-related costs, and increase prices more than necessary. "With geopolitical tensions and the threat of tariffs and so on, it's expected that would lead to an increase in prices," said Dewhirst. "And we have observed in the past, especially [due to] the lack of competition that there is among the grocers in Canada, that there are opportunities potentially for price gouging or allegations of profiteering." Calgary grocer takes a different approach Mike Soufan, owner of Calgary grocery wholesaler Freestone, said a small portion of his clientele have asked to be directed to Canadian products while shopping in his store. But he has no plans to launch a marketing blitz to highlight those products — he'll leave that to the grocery giants, he told CBC News. "A lot of people ask if it's a Canadian product, 'I'm not buying U.S.,' but I think they're in the minority. Other people don't care. They only care about the price," he said. WATCH | How affordable is patriotism at the grocery store?: Can you afford to be patriotic when grocery shopping? 4 days ago Duration 4:09 As trade uncertainty continues between Canada and the United States, many Manitobans are trying to buy more Canadian products. But how affordable is patriotism at the grocery store? CBC's Matt Humphrey finds out. Soufan said he plans to share the cost of the tariff with his supplier and his trucking company to keep prices low for consumers. The store imports produce from the U.S. and other countries like Mexico and Peru, in addition to sourcing products domestically, and he's more worried about importing food with a weak Canadian dollar than he is about a tax on goods. He acknowledged he would have to bargain with suppliers and cut expenses in the store to make up for a 25 per cent tariff. But he said he wouldn't join the major grocers in their Buy Canadian marketing push. "I'm not playing that game," he said. "I'll let people make their choice."
CBC
21-02-2025
- Business
- CBC
Loblaw takes PC Optimum hit as customers cash in more points
Social Sharing Loblaw Companies Ltd. is seeing more participation in its popular PC Optimum loyalty program — and more points being redeemed at checkout. Customers redeemed more than a billion dollars' worth of Optimum points in 2024, according to Loblaw's annual report. There are more than 17 million active Optimum users. The strength of the program caused the grocery retailer to take a non-cash charge of $129 million in its fourth quarter that drove profits lower year over year, as the company re-evaluated the program's liability for outstanding Optimum points to reflect the higher use. "We increased this liability based on our expectation that more customers will redeem more of their … points going forward," said chief financial officer Richard Durfresne on a conference call discussing the results. "What it reflects is that more and more consumers are liking PC Optimum, are using it, and so from our perspective ... we're more than happy to do it because it reflects what's happening in our stores." The parent company of Loblaws and Shoppers Drug Mart says its net earnings available to common shareholders amounted to $462 million or $1.52 per diluted share for the quarter ended Dec. 28. The result was down from a profit of $541 million or $1.72 per diluted share in the fourth quarter of 2023. Loblaw highlighting Canadian products Amid a looming trade war with the U.S. that could see import tariffs on both sides of the border, Loblaw has been highlighting domestic products in its stores as shoppers look to buy Canadian. It also added a "swap and shop" feature to its loyalty app to help shoppers find Canadian products more easily. The efforts appear to be paying off. "As we continue to expand this feature, we are already seeing a significant uplift in sales [of] products identified as prepared in Canada," said CEO Per Bank. Loblaw is also monitoring how tariffs could affect prices on its U.S. products. If Trump brings in tariffs and Canada retaliates, it may have to pay more for items it brings in from south of the border, which would also put upward pressure on retail prices. Less than 10 per cent of the company's supply comes from the U.S., said Bank, with most of it being produce. Canada is particularly reliant on produce imports in the winter. "If tariffs are applied on produce, there's where we will be mostly impacted," said Bank. WATCH | Big grocers caught overcharging on meat: Grocery stores overcharge for meat by including package weight 1 month ago Duration 2:36 A CBC News investigation discovered some Canadian grocers were found to be overcharging customers, potentially by including the weight of the packaging in the cost of meat, which over time could add up to millions in profit. One of the grocers has apologized and all have pledged to address the issue. The company has some plans to mitigate the effects of tariffs, but produce is the hardest thing to replace, said Bank, estimating Loblaw could mitigate the impact on about half of the U.S. produce the company buys. "We are seeing these tariffs as a kind of tax on products that will hurt consumers on both sides," he said. But in other areas, the company is better positioned to offer consumers an alternative, Bank said. For example, Loblaw carriers household and cleaning products from more than 30 U.S. vendors but also has a strong array of products in that category among its private-label brands No Name and President's Choice, he said. "If the tariffs will be applied on household and cleaning, then of course, those products will not be competitive anymore, and all the sales will go to our control brands, and they're all produce in Canada," he said. "So that's good for Canada, it's good for customers, and it's good for us." The weakness of the Canadian dollar is adding further inflationary pressure at a time when Canada relies on the U.S. for fresh produce, added Dufresne. "That is inflationary, and we've been starting to feel it quite seriously over the last few weeks." The loonie's decline is also compounding the fact that Loblaw continues to see higher-than-normal price increase requests from large global suppliers, he said. Company to open 50 discount grocers this year On Wednesday Loblaw announced it plans to spend $2.2 billion in 2025, opening 80 new grocery and pharmacy stores with about 50 of them being discount grocers. Bank says many will be smaller-format stores, building the company's network of those types of grocers after launching small-format No Frills stores for the first time last May. The investment, which is part of about $10 billion over five years, will also add 100 pharmacy care clinics to the company's network. The company is also planning to open the first phase of its new automated distribution centre in East Gwillimbury, Ont. The ramp-up starts with frozen products, said Bank. Loblaw opened 52 new stores in 2024, as well as 78 new clinics. On an adjusted basis, Loblaw says it earned $2.20 per diluted share in its latest quarter, up from an adjusted profit of $2 per diluted share a year earlier. Revenue for the quarter totalled $14.9 billion, up from $14.5 billion, as food retail same-stores sales rose by 2.5 per cent. Excluding the favourable impact of the timing of Thanksgiving, Loblaw says food retail same-store sales were up about 1.5 per cent. Consumers continue to favour discount stores over conventional stores, though the gap is stabilizing, said Dufresne. Drug retail same-store sales rose 1.3 per cent, with pharmacy and health care services same-store sales up 6.3 per cent, offset in part by a 3.1 per cent drop in front store same-store sales.
Yahoo
21-02-2025
- Business
- Yahoo
Loblaw takes PC Optimum charge in Q4 as more customers redeem loyalty points
Loblaw Companies Ltd. is seeing more participation in its popular PC Optimum loyalty program — and more points being redeemed at checkout. Customers redeemed more than a billion dollars' worth of Optimum points in 2024, according to Loblaw's annual report. There are more than 17 million active Optimum users. The strength of the program caused the grocery retailer to take a non-cash charge of $129 million in its fourth quarter that drove profits lower year over year, as the company re-evaluated the program's liability for outstanding Optimum points to reflect the higher use. "We increased this liability based on our expectation that more customers will redeem more of their ... points going forward," said chief financial officer Richard Durfresne on a conference call discussing the results. "What it reflects is that more and more consumers are liking PC Optimum, are using it, and so from our perspective ... we're more than happy to do it because it reflects what's happening in our stores." The parent company of Loblaws and Shoppers Drug Mart says its net earnings available to common shareholders amounted to $462 million or $1.52 per diluted share for the quarter ended Dec. 28. The result was down from a profit of $541 million or $1.72 per diluted share in the fourth quarter of 2023. Amid a looming trade war with the U.S. that could see import tariffs on both sides of the border, Loblaw has been highlighting domestic products in its stores as shoppers look to buy Canadian. It also added a "swap and shop" feature to its loyalty app to help shoppers find Canadian products more easily. The efforts appear to be paying off. "As we continue to expand this feature, we are already seeing a significant uplift in sales (of) products identified as prepared in Canada," said CEO Per Bank. Loblaw is also monitoring how tariffs could affect prices on its U.S. products. If Trump brings in tariffs and Canada retaliates, it may have to pay more for items it brings in from south of the border, which would also put upward pressure on retail prices. Less than 10 per cent of the company's supply comes from the U.S., said Bank, with most of it being produce. Canada is particularly reliant on produce imports in the winter. "If tariffs are applied on produce, there's where we will be mostly impacted," said Bank. The company has some plans to mitigate the effects of tariffs, but produce is the hardest thing to replace, said Bank, estimating Loblaw could mitigate the impact on about half of the U.S. produce the company buys. "We are seeing these tariffs as a kind of tax on products that will hurt consumers on both sides," he said. But in other areas, the company is better positioned to offer consumers an alternative, Bank said. For example, Loblaw carriers household and cleaning products from more than 30 U.S. vendors but also has a strong array of products in that category among its private-label brands No Name and President's Choice, he said. "If the tariffs will be applied on household and cleaning, then of course, those products will not be competitive anymore, and all the sales will go to our control brands, and they're all produce in Canada," he said. "So that's good for Canada, it's good for customers, and it's good for us." The weakness of the Canadian dollar is adding further inflationary pressure at a time when Canada relies on the U.S. for fresh produce, added Dufresne. "That is inflationary, and we've been starting to feel it quite seriously over the last few weeks." The loonie's decline is also compounding the fact that Loblaw continues to see higher-than-normal price increase requests from large global suppliers, he said. On Wednesday Loblaw announced it plans to spend $2.2 billion in 2025, opening 80 new grocery and pharmacy stores with about 50 of them being discount grocers. Bank says many will be smaller-format stores, building the company's network of those types of grocers after launching small-format No Frills stores for the first time last May. The investment, which is part of about $10 billion over five years, will also add 100 pharmacy care clinics to the company's network. The company is also planning to open the first phase of its new automated distribution centre in East Gwillimbury, Ont. The ramp-up starts with frozen products, said Bank. Loblaw opened 52 new stores in 2024 as well as 78 new clinics. On an adjusted basis, Loblaw says it earned $2.20 per diluted share in its latest quarter, up from an adjusted profit of $2 per diluted share a year earlier. Revenue for the quarter totalled $14.9 billion, up from $14.5 billion, as food retail same-stores sales rose by 2.5 per cent. Excluding the favourable impact of the timing of Thanksgiving, Loblaw says food retail same-store sales were up about 1.5 per cent. Consumers continue to favour discount stores over conventional stores, though the gap is stabilizing, said Dufresne. Drug retail same-store sales rose 1.3 per cent, with pharmacy and health care services same-store sales up 6.3 per cent, offset in part by a 3.1 per cent drop in front store same-store sales. Loblaw shares fell 2.6 per cent to $174.75 Thursday on the Toronto Stock Exchange. This report by The Canadian Press was first published Feb. 20, 2025. Companies in this story: (TSX:L) Rosa Saba, The Canadian Press Sign in to access your portfolio
Yahoo
20-02-2025
- Business
- Yahoo
Loblaw seeking new suppliers, promoting Canadian products amid tariff threat uncertainty
Loblaw ( CEO Per Bank says the company is trying to mitigate the potential impact of Trump tariffs by seeking new suppliers while also promoting Canadian products, which have seen a boost in sales in recent weeks. Bank said on a conference call with analysts following the release of quarterly earnings on Thursday that U.S. products represent less than 10 per cent of its cost of good sold (COGS), a retail term that quantifies the costs Loblaw incurs to sell a product. However, most of those American products that Loblaw sells in its stores are in the produce category, which Bank says will be "the most difficult place" to mitigate potential tariffs. "I think we can probably mitigate half of our suppliers," he said on the call. "It's our job to work hard with suppliers and try to mitigate as much of the impact as possible." U.S. President Donald Trump has threatened 25 per cent tariffs on non-energy imports from Canada, with Prime Minister Justin Trudeau vowing to reciprocate with retaliatory tariffs. Although the tariffs have not gone into effect amid a 30-day pause, Canadian customers have already responded to the threat, with many vowing to "Buy Canadian." Canadian grocers have reacted to the movement, seeking alternatives to U.S. products while highlighting homegrown products available on shelves. We're really trying to do everything we can to help them," Bank said, pointing out that Loblaw's digital team rolled out a "swap and shop" feature in its PC Optimum app that allows customers to swap items on shopping lists for Canadian-made products. He says the feature saw a 75 per cent increase in usage week-over-week. Bank also says Loblaw has seen a 10 per cent uplift in sales of Canadian products, prior to rolling out labels that signify which products are made in Canada. More of those labels will be rolled out mid-next week. "We will probably see a further uplift when it comes to that," Bank said. Bank's comments came as Loblaw reported quarterly sales and profit that fell slightly short of analyst expectations, according to Reuters. Total sales in the fourth quarter increased 2.9 per cent annually to $14.948 billion, short of analysts' average estimate of $14.954 billion. The company also reported an adjusted profit of $2.20 per diluted share, while analysts were expecting earnings of $2.21 per diluted share. Loblaw reported adjusted net earnings of $462 million, down nearly 15 per cent from $541 million last year, driven by a non-cash charge of $129 million related to its PC Optimum program liability. Chief financial officer Richard Dufresne says the charge "reflects the fact that customer engagement with our popular PC Optimum program is increasing, leading to higher redemption rates in our stores in recent years." "We increased this liability based on our expectations that more customers will redeem more of their PC Optimum points going forward, reflecting the long-term success of our program," Dufresne said. Shares of Loblaw fell after the earnings were released. The company's stock was trading at $177.49 per share as at 1:25 p.m. ET, a drop of one per cent compared to Wednesday's close. With files from Reuters. Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on X @alicjawithaj. Download the Yahoo Finance app, available for Apple and Android. Sign in to access your portfolio
