Still-high inflation and rising cost-of-living has led Canadian consumers to try and tighten household budgets and save money, impacting their discretionary spending.

Quarterly same-store sales at Loblaw’s drug retail rose 3.9 per cent from a year ago, while in food retail segment they increased by 1.5 per cent.

However, sales in Canada in December saw a brief bump up due to the holiday season, as consumers increased their spending on food and beverages. Demand for value deals helped Loblaw’s discount banners such as No Frills and Maxi.

The company’s revenue came in at C$16.38 billion for the quarter ended January 3, compared with analysts’ estimates of $16.77 billion, according to data compiled by LSEG.

On an adjusted basis, Loblaw earned 67 cents per share in the reported quarter, slightly ahead of estimates of 66 cents.

Loblaw expects annual adjusted net earnings per share to grow in the high single-digits, compared with analysts’ expectations of a 7.9 per cent rise to $2.61.

— Reporting by Koyena Das in Bengaluru

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The retailer’s focus on discount banners such as Maxi and No Frills and value-driven programs like keeping prices low and rolling out aggressive promotions has helped attract more budget-conscious Canadians.

Quarterly same-store sales at its food retail segment rose two per cent, while in drug retail they increased four per cent from a year ago.

Retailers are also benefiting from the “Buy Canadian” movement sparked by trade disputes between the country and the U.S., as consumers switch to locally made goods, leading to a dramatic reshuffling of shelves at stores in Canada.

Loblaw now expects annual adjusted net earnings per share growth to increase slightly in the low double-digit percentage range, compared with its prior forecast of high single-digit percentage growth.In October, U.S. President Donald Trump said he was increasing tariffs on Canada by an additional 10 per cent, but did not provide clarity on which goods would be affected.

Two months earlier, the Trump administration had imposed a 35 per cent tariff on Canadian goods not covered by the United States-Mexico-Canada Agreement.

Canadian retail sales rebounded in August as shoppers splurged on new cars, clothing and at supermarkets, according to data from Canada’s national statistics agency.

Loblaw posted quarterly revenue of C$19.40 billion, in line with analysts’ estimates, as per data compiled by LSEG.

It also earned adjusted profit of 69 Canadian cents for the reported quarter, compared with estimates of 68 cents per share.

— Reporting by Anuja Bharat Mistry in Bengaluru

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Judge Edward M. Morgan handed down the decision against Grocery giant Loblaw, Weston Bakeries Limited, and parent company George Weston Limited in early May.

The class action included more than 20 million members, Morgan said in his decision.

The settlement includes a settlement payment of $404 million plus the $96 million that Loblaw previously paid out in gift cards to potential class action members.

The funds will be split with $390 million going to the Ontario action and $110 million to a parallel Quebec action.

Loblaw and George Weston Limited announced in July 2024 they’d reached a settlement and apologized for their part in the price-fixing.

In late 2017, Canada’s competition bureau began an investigation over allegations of industry-wide bread price fixing between the late 2000s and early 2010s.

The bureau found that grocers had conspired to raise bread prices.

In early 2018, Loblaw offered $25 gift cards to Canadian consumers as an olive branch related to the price fixing.

Loblaw also admitted to its rule in the price collusion.

The parties named in the class action suite also include Canada Bread Company, Grupo Bimbo, Wal-Mart Canada Corp., Sobeys, Inc., Giant Tiger Stores Limited and several others.

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“We are sorry for the price-fixing behaviour we discovered and self-reported in 2015. This behaviour should never have happened,” said Galen G. Weston, Loblaw’s chair and chair and CEO of George Weston.

“Reaching a settlement on this matter was the right thing to do in response to previous behaviour that did not meet our values and ethical standards.”

The total settlement includes a cash payment of $404 million and $96 million that has already been paid through the “Loblaw Card program,” according to a news release from George Weston Limited.

The decision had not been finalized or received court approval as of July 25. Once approved, it will be the largest anti-trust settlement in Canadian history according to class action firm LPC Advocats

In late 2017, Canada’s competition bureau began an investigation over allegations of industry-wide bread price fixing between the late 2000s and early 2010s.

In early 2018, customers were offered $25 gift cards as an olive-branch related to the price-fixing. CBC reported at the time that those who received the cards could still participate in a class-action suit, but the $25 would be deducted from any payout.

The parties named in the class action suite are Loblaw, George Weston, Canada Bread, Sobeys, Metro, Wal-Mart and Giant Tiger, according to LPC Advocats’ website.

The bureau found grocers had colluded to raise bread prices.

In 2023, Canada Bread (Bimbo Canada), which makes Dempsters, Villaggio, Hostess and other familiar brands, was fined $50 million for its part in the price-fixing.

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“This is a positive step towards bringing more fairness, transparency, and predictability to Canada’s grocery supply chain and for consumers,” the ministers said.

In the statement, Canada’s federal, provincial and territorial Ministers of Agriculture said “years of work and widespread industry participation” has been put into developing the Code of Conduct. Until recently, Walmart and Costco were the only two major grocery retailers to not join the Code of Conduct. Metro and Sobeys signed on last year, while Loblaw agreed this past May after months-long negotiations and a social media-driven campaign by angry consumers urging others to boycott Loblaw stores due to high prices.

Stemming from friction between retailers and suppliers, the code was developed by the industry to promote transparency and fairness, and to solve disputes. It’s been in the works since 2021.

“The goal of the Grocery Sector Code of Conduct is to bring fairness, transparency, and predictability to our grocery sector and supply chain,” a statement from AAFC said after Loblaw joined the Code of Conduct in May. “We believe that uniting all supply chain partners around these principles will produce the best outcomes for the sector and all Canadians.”

—with files from Janelle Rudolph

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The company’s top brass confirmed their commitment to the policy May 16 at the company’s supplier summit.
“We have worked intensively and collaboratively with industry groups so that the code is clearly drafted and fair for all industry participants,” said Per Bank, Loblaw President and chief executive officer.

Stemming from friction between retailers and suppliers, the code was developed by the industry to promote transparency and fairness, and to solve disputes. It’s been in the works since 2021. 

The announcement comes following six months of company interim board discussions and December statements from Loblaw executive chair Galen Weston that a grocery code would cause higher food prices or fewer food choices.

The company was also at the heart of a social-medial sparked national boycott effort, which was to start this month.
In September 2023, major grocery chains promised to take action to stabilize prices in the wake of continued concern over grocery costs.

Loblaw says the next steps for the code will be for other major grocers—i.e. Walmart—to sign on.

“We believe in the value of a code of conduct for the industry and are happy with the progress made,” Bank said. “The Code now requires the participation of all major retailers and suppliers to help bring in a new era for Canada’s grocery industry, enhancing the relationship between retailers and suppliers, who both exist to best serve customers.”

Lawrence MacAulay, federal minister of agriculture and agri-food, and Andre Lamontagne, Quebec minister of agriculture, fisheries, and food, issued a joint statement following Loblaw’s announcement.

The two echoed Bank’s call for other grocers to follow Loblaw’s lead.

“The goal of the Grocery Sector Code of Conduct is to bring fairness, transparency, and predictability to our grocery sector and supply chain,” the statement read. “We believe that uniting all supply chain partners around these principles will produce the best outcomes for the sector and all Canadians. With the news that Loblaw is signing on, we now call on the remaining large retailers to do what is in the best interests of Canadians and follow suit.”

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They noted that an “overabundance” of sustainability claims and the growth of “greenwashing” makes a credible, consistent standard even more important to ensure consumer trust.

Deloitte worked with the Canadian Alliance for Net-Zero Agri-Food (CANZA), whose members include McCain, Loblaw Companies and RBC. In “Growing a Net Zero Food System: An open-source framework for climate-smart agri-food products in Canada,” the authors examined existing practices, trends in the food sector, and what will be needed to successfully meet Canada’s ‘net zero’ carbon goals.

A more robust and uniform system for the measurement, reporting and verification (MRV) of greenhouse gas reductions and removals is at the heart of the challenge, they noted. They found that many Canadian companies “… are already advancing innovative solutions,” but also found many of these organizations are also struggling with exactly how to account for climate smart practices.

Many of the challenges relate to data, including trust, data ownership, access to farm-level data, traceability across the value chain, the cost of implementation, and ensuring that meeting data needs won’t impose undue burdens on farmers, the report found.

In the report, Deloitte recommends an open-source framework that could be used by any stakeholder in the agri-food sector, with defined measurement methodology.

“It can be used by industry associations, financial institutions, or industry players to support GHG accounting and measurement in existing product labels and certification schemes,” the report states.

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“We are ensuring a fair and equitable environment for our growers, which is fundamental for the prosperity of the entire supply chain,” said FVGC in a news release.

FVGC’s executive director, Rebecca Lee, is listed as a member of the steering committee in charge of developing the code.

The industry-developed code, which proposes rules for fairness and transparency in the grocery sector, is expected to stabilize growers’ incomes, the FVGC said.

“Canada’s Grocery Sector Code of Conduct acts as a protective measure for the entire supply chain,” it added. “It addresses longstanding issues such as payment terms and contract fairness, which are crucial for the viability and sustainability of Canadian growers.”

It isn’t expected to increase costs to consumers, the news release said.

The code has run into headwinds in recent days as two of Canada’s largest grocers expressed reluctance to sign on to it.

Last week, Loblaw executive chair Galen Weston told the standing agriculture committee the code as currently written would cause higher prices, and Walmart Canada chief executive officer Gonzalo Gebera expressed similar sentiments.

Weston said Loblaw takes issue with clauses that govern written contracts with suppliers, whether retailers can charge suppliers fees when orders aren’t fulfilled, and others.

Michael Medline, CEO of Empire Company Ltd., which owns Sobeys, supports the code.

“This code is not a document comprising overly prescriptive regulations, but simply a straightforward set of principles of good behaviour developed by industry itself. That’s it. It won’t increase food prices, as Loblaw has claimed,” said Gary Sands, senior vice-president of the Canadian Federation of Independent Grocers.

–with files from Karen Briere. Geralyn Wichers is associate digital editor of AGCanada.com.

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Ontario’s Superior Court on Wednesday sentenced Toronto-based Canada Bread Co. after the company pled guilty to four counts of fixing bread prices in 2007 and 2011.

The allegations to which Canada Bread pled guilty came to light in an “industry-wide” federal investigation launched in 2017 by the Competition Bureau. The bureau defines price-fixing as a form of illegal cartel behaviour in which two or more competing businesses agree to set the same prices for goods or services.

According to the federal Public Prosecution Service, an agreed statement of facts filed in court has Canada Bread — which at the time was majority-owned by Maple Leaf Foods — admitting it entered into arrangements with competitor Weston Foods and others to increase wholesale prices on four occasions.

The arrangements, according to the statement of facts, led to two price increases — one each in October 2007 and March 2011. The Competition Bureau, in a separate release Wednesday, said the increased prices affected “various bagged and sliced bread products, such as sandwich bread, hot dog buns and rolls.”

Canada Bread, citing court documents, said that in 2007 and 2010-11, “one or more” senior executives at Weston made four pricing arrangements directly with the then-CEO of Canada Bread.

Weston, its sister firm Loblaw and their parent firm George Weston Ltd. have received immunity from prosecution in exchange for “full co-operation” with the bureau’s investigation, the bureau said.

READ MORE: Loblaw, Weston bake the numbers, burn consumers

The $50 million fine on Canada Bread was the maximum applicable, at $10 million each for the pre-2010 counts and $25 million each for the remaining two counts, minus a “leniency rebate” of about 30 per cent, given the company’s guilty plea and current co-operation with the probe.

The Competition Bureau on Wednesday described the record fine for Canada Bread as a “significant milestone” in its ongoing investigation, looking at alleged price-fixing between producers to raise wholesale bread prices, as well as alleged price-fixing between grocery stores to raise retail prices.

That ongoing probe continues to investigate other companies, the bureau said Wednesday, naming Maple Leaf as well as retailers Metro, Sobeys, Wal-Mart Canada and Giant Tiger. The bureau said its probe has included search warrants executed at those companies as well as at Canada Bread and at Overwaitea, the B.C. parent of retailer Save-On-Foods.

“Fixing the price of bread — a food staple of Canadian households — was a serious criminal offence,” Matthew Boswell, Canada’s commissioner of competition, said in the bureau’s release. “Our continuing investigation remains a top priority. We are doing everything in our power to pursue those who engage in price-fixing.”

As for Canada Bread, the senior leadership responsible for the price-fixing is no longer with the company, the bureau said. Canada Bread has been owned since 2014 by Mexican bakery giant Grupo Bimbo and now operates under the name Bimbo Canada.

Canada Bread, which went by that name in a separate release Wednesday on the matter, emphasized in that release that Grupo Bimbo “was not told of, nor did it uncover, this prior conduct during the sale process” and that Bimbo “only learned about the conduct in 2017.”

Since then, Canada Bread said, its new management has provided “material and consistent co-operation” to the Competition Bureau in the probe and has “established controls and initiatives to create a first-tier compliance program.”

“Under new ownership, Canada Bread is committed to being a responsible partner to our valued customers and making bread an accessible and reliable food source for Canadians,” vice-president Alice Lee said in Wednesday’s release. “We are pleased to have resolved this matter, and we look forward to building upon our investments in Canada.”

Canada Bread also said Wednesday that Bimbo is “considering all legal options against those responsible for the conduct addressed in court today.”

Bimbo Canada today operates 16 bakeries and 11 distribution centres across Canada. Its retail bread brands include Dempster’s, Pom, Stonemill, Bon Matin and Ben’s, among others. — Glacier FarmMedia Network

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Price rises for store-bought food have been outpacing the broader annual inflation rate for 10 consecutive months, and grew 11.4 per cent in September, the fastest pace in over four decades, according to Statistics Canada.

“With inflation on the rise, Canadian consumers have seen their purchasing power decline. This is especially true when buying groceries,” the Competition Bureau said in a statement.

Canada’s opposition New Democrats (NDP), who have a deal to keep Prime Minister Justin Trudeau’s minority government in power until 2025, have been calling out grocery chain operators for high food prices.

Last week, the House of Commons supported an NDP proposal asking the government to make grocery store operators more accountable and impose tougher penalties for price-fixing and stronger competition laws.

The Competition Bureau said it would study whether competition factors were impacting the price of food — on top of other factors including Russia’s invasion of Ukraine and supply chain disruptions — but it was not investigating specific allegations of wrongdoing.

Results from the study are expected to be released in June. The bureau also opened up an eight-week public comment period on the matter, for which it will accept submissions until Dec. 16.

The watchdog said the grocery industry was complex and it might not have enough information to draw firm conclusions, but it expected to recommend measures that governments could take to help to improve competition.

Grocery chain operator Loblaw Cos., which reported a quarterly profit of $387 million on $12.85 billion revenue in July, said last week it was freezing prices of some 1,500 products of its in-store “no-name” brand until the end of January.

“Clearly, the rich CEOs of big grocery stores can reduce food costs for Canadian families,” the federal NDP said in a release last week following Loblaw’s announcement.

— Reporting for Reuters by Ismail Shakil in Ottawa. Includes files from Glacier FarmMedia Network staff.

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