Sales were down in three of the nine subsectors with the building materials category and furniture, electronics and appliances retailers category also reporting a drop in sales. Sales at fuel pumps helped offset some of the fall, StatsCan said.

In volume terms, retail sales were unchanged in December.

WHY IT MATTERS: Retail sales, which include domestic sales of cars, furniture, food and gasoline, are considered an early indicator of gross domestic product growth and contribute around 40 per cent to total consumer spending.

Core retail sales, which exclude gasoline stations and fuel vendors and the motor vehicle and parts dealers, were down 0.3 per cent in December.

The motor vehicles and parts dealers’ category, which accounts for over a fourth of total retail sales, fell by 1.6 per cent to $18.71 billion.

The second biggest contributor to retail sales is the food and beverage retailer category. Sales were unchanged in December in this subsector.

Building materials dropped by four per cent and the furniture and appliances category registered a 1.7 per cent month-on-month drop.

In January, sales were likely up 1.5 per cent but this number is likely to be updated next month, the agency said in a flash estimate.

— Reporting by Promit Mukherjee and Dale Smith

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In October, sales were down in four of the nine subsectors, representing 41.6 per cent of retail sales. In volume terms, retail sales decreased 0.6 per cent in October.

Retail sales, which include domestic sales of cars, furniture, food and gasoline, are considered an early indicator of gross domestic product growth and contribute around 40 per cent to total consumer spending.

Core retail sales, which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers, were down 0.5 per cent in October.

The largest decrease to core retail sales came from food and beverage retailers, with beer, wine and liquor retailers contributing the most to the decline.

Sales were also down in the clothing and clothing accessories sector and at health and personal care retailers in October, StatsCan said.

Motor vehicle and parts dealers’ sales were up 0.6 per cent, recording the largest increase in retail sales in October. This was mainly led by sales of new cars.

Sales were likely up 1.2 per cent in November, the agency said in a flash estimate.

— Reporting by Promit Mukherjee and Dale Smith

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Innovation Minister Francois-Philippe Champagne made the announcement after two hours of what he said were difficult discussions with the chains.

Champagne, who summoned the executives to Ottawa, reiterated a threat that the government could impose new taxes if the chains do not come up with a plan to help address budget-busting price increases.

“They have agreed to support the government of Canada in our efforts to stabilize prices in Canada,” Champagne told reporters, without giving details.

“This is a step in the right direction,” he said. “We’ll keep on pushing them — trust me, this is just the beginning.”

Champagne said in a separate statement the government wants to see “concrete actions” from the retailers by Thanksgiving (Oct. 9).

However, he said, any such actions “must not negatively impact small suppliers or the price that farmers receive for their products.”

Any moves by the grocers, he said, also must not impact “pricing mechanisms as determined by supply-managed industries” such as Canada’s dairy, egg and poultry sectors.

The Liberals are trailing in the polls and facing complaints about the high cost of living and a lack of affordable housing.

One of the five executives at the meeting, Metro CEO Eric La Fleche, said the chains were keen to do all they could but dismissed the idea that they alone were to blame.

“We’re all committed to finding solutions to stabilize prices … it’s an industry issue. Any conversation has to include all the manufacturers, producers, farmers and everybody,” the CEO said.

“It’s not just about the retailers, the minister understands that very clearly.”

The other chains attending the meeting were Loblaws, Sobeys, Walmart and Costco, which together with Metro represent 80 per cent of the Canadian market.

As part of the government’s push to cope with high prices, Prime Minister Justin Trudeau last week announced a tax break designed to boost the construction of new rental apartment buildings and relieve pressure on the Canadian housing market.

Karina Gould, the minister in charge of pushing the government’s agenda through the House of Commons, said she would shortly introduce wide-ranging draft legislation designed to help curb inflation.

Polls show the official opposition Conservatives, who blame high inflation on Trudeau for what they call excessive government spending, would win an election if one were held now, ending eight years of Liberal rule.

— Reporting for Reuters by Steve Scherer and David Ljunggren. Includes files from Glacier FarmMedia Network staff.

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After meeting with Liberal Party legislators in London, Ont., Trudeau said the government asked the executives of the five largest grocery chains, including Loblaw, Sobeys and Metro, to come to Ottawa next week to explain how they will stabilize prices. The five companies, representing 80 per cent of the Canadian grocery market, have until Oct. 9 to come up with a proposal.

“If their plan doesn’t provide real relief … we will take further action and we are not ruling anything out, including tax measures,” Trudeau said.

“It does not make sense in a country like Canada that our largest grocery chains should be making record profits while Canadians are struggling to put food on the table.”

In 2022, Canada’s three largest grocers — Loblaw, Sobeys, and Metro — collectively reported more than $100 billion in sales and earned more than $3.6 billion in profit.

Trudeau, who is under pressure over a lack of affordable housing, said his government will remove the federal five per cent sales tax on the construction of new rental apartment buildings.

“There are many developers and builders that are not moving forward with building new apartments because the costs are simply too high,” Trudeau said, adding the measure will lead to the creation of many new apartment buildings.

Trudeau’s minority government is propped up by left-leaning New Democrats and a federal election is only due in 2025. But opinion polls show the main opposition Conservatives, who accuse Trudeau of driving inflation through high government spending, would win power and end eight years of Liberal rule if an election were held now.

Boosting competition

Several grocery executives denied profiteering charges in a parliamentary committee earlier this year. But the lack of competition in the grocery sector has also irked the federal competition watchdog, and in June, it said more players were crucial to combat soaring prices of essential goods.

Trudeau waded into that debate on Thursday and said his government will remove provisions in competition laws that companies use to defend big mergers, saying cost savings outweigh negative impacts on competition.

Soaring food prices have been a concern for European governments as well and in March the French government reached a deal with the country’s main supermarket chains to help shoppers cope with food prices.

But the Retail Council of Canada pushed back against Trudeau’s claims and blamed the surging prices on food manufacturers and producers passing on higher costs to the grocers.

The association’s spokesperson Michelle Wasylyshen said any “credible discussion” on restoring prices must include food processors, manufacturers and other relevant businesses within the supply chain.

Sobeys and Walmart Canada had no immediate comment, while Metro declined comment. Loblaw said the company was “always open to discussions about what more can be done across the industry.”

In July, Trudeau shuffled much of his cabinet to focus on issues like a housing shortage and the rising cost of living and on Thursday he reiterated that he had no plan to quit.

Conservative leader Pierre Poilievre on Thursday again blamed the housing crisis on Trudeau, and said he would introduce his own plan to get homes built to parliament when it reconvenes next week after the summer break.

— Reporting for Reuters by David Ljunggren and Steve Scherer; additional reporting by Deborah Sophia in Bangalore; writing by Denny Thomas.

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The count for April 2023 from the Association of Equipment Manufacturers (AEM) puts self-propelled combine sales in Canada at 166, up 50.9 per cent from April 2022, and at 572 for the year to date, up from 246 in the year-earlier period.

Sales of two-wheel-drive (2WD) tractors in Canada saw a marked decline in April, particularly in models under 40 horsepower (1,269, down 34.4 per cent). April sales of 2WD tractors came in at 2,098 for the month, down 27.7 per cent from April 2022, and at 7,462 year-to-date, down 15.1 per cent from the year-earlier.

Taken together, sales of tractors and combines in Canada in April 2023 were below the total for each of 2021 and 2022 and below the five-year (2018-22) average.

“In April we saw an increase in sales of the 100+hp farm tractors, but a decline in both the smaller tractor units, which is likely due to sub-compact market decline, which represents a large volume of units and had record sales in 2020 through 2022,” Curt Blades, senior vice-president, industry sectors and product leadership for Milwaukee-based AEM, said of the combined Canada/U.S. market in a release.

“And because commodity markets for agriculture products remain strong, we continue to see increases in sales of the larger, more expensive segments of 4WD tractors and self-propelled harvesters.”

In Canada, sales of 4WD tractors reached 166 in April 2023, up 50.9 per cent from April 2022, and 572 year-to-date, up from 246 in the year-earlier period.

Similarly, in the U.S., sales of combines and 4WD tractors were up 23.1 and 54.1 per cent in April 2023 over April 2022, and up 71.9 and 51.6 per cent in the year to date, while 2WD tractors below 100 hp saw marked declines.

AEM emphasizes its data are, in part, estimates and represent most, but not all, manufacturers in each product category being sold at retail in Canada. — Glacier FarmMedia Network

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According to the latest FCC Food and Beverage Report, released Tuesday, sales increased 11 per cent to $156 billion in 2022. These gains came largely from higher export values and strength in the grain and oilseed milling industry.

On the manufacturing side, margins were tighter last year as companies navigated increases in the prices of raw materials, labour shortages and supply chain disruptions.

“Gross margins as a percent of sales fell to their lowest level in over 20 years in 2022,” FCC’s chief economist J.P. Gervais said.

“While margin trends vary based on industry, we do anticipate an overall improvement to gross margins in the coming year.”

FCC projects a modest two per cent growth in sales in 2023. However, dairy, meat and seafood are expected to outperform that forecast.

“Consumers cut back on discretionary spending last year as they faced higher inflation, depleted savings and higher costs of servicing debt,” Gervais said.

Domestically-produced food faced a decline, reverting to the pre-pandemic consumption mix of domestic versus foreign foods. However, that’s partly the result of an increasingly diverse Canadian population looking to put different kinds of food on their tables.

“Inflation led to changes in food consumption decisions which resulted in fewer purchases of locally made or higher-value foods that consumers supported in mass during pandemic lockdowns,” Gervais said.

“We all know money doesn’t have the same buying power it once did, and consumers are being careful with their grocery budgets. Despite inflationary pressures, we continue to see Canada’s food and beverage sector adapt and innovate to meet the changing market demands.

“The sector remains healthy and has a positive long-term outlook.”

Global demand for Canadian-produced food is growing rapidly, he said. Promising food manufacturing innovations and technology can position Canada to expand its reach into profitable emerging industries.

There is also opportunity to grow the sector by meeting consumer demand for affordable, convenient and sustainably produced foods.

“How businesses adapt to changing consumer needs and economic conditions will determine their success going forward,” Gervais said.

“There have been many tests of resiliency and adaptability in recent years and the strength of the sector proves that despite challenges, there are opportunities Canadian food and beverage manufacturers are eager to take advantage of.”

The annual FCC Food and Beverage Report features insights and analysis on grain and oilseed milling; dairy, meat, sugar, confectionery, bakery and tortilla products; seafood preparation; and fruit, vegetable and specialty foods as well as soft drinks and alcoholic beverages. — Glacier FarmMedia Network

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After the House of Commons resumed sitting last Monday (Jan. 30), NDP leader Jagmeet Singh on Friday named Alistair MacGregor, MP for the Vancouver Island riding of Cowichan-Malahat-Langford, to an additional role as critic for food price inflation.

“Everyone should be able to afford healthy food,” Singh said in a release. “But right now, families are crossing items off their grocery list, or racking up bigger bills at the till — and the Liberals are letting it happen.”

McGregor, the party’s ag critic since 2018, will “fight for every tool possible to stop greedflation, so people have… more breathing room,” Singh said. “That includes leading the fight for a windfall tax, because we have to stop rewarding grocery giants for gouging families.”

With MacGregor’s new assignment, his previous additional role as the party’s critic for public safety goes to another British Columbia MP, the NDP’s House leader Peter Julian.

Singh also shuffled duties to two other B.C. MPs: Richard Cannings, the party’s critic for emergency preparedness/climate change resilience, will also pick up the international trade file from Windsor MP Brian Masse, while Taylor Bachrach becomes deputy critic for fisheries and oceans, taking over from another Vancouver Island MP, Gord Johns.

While the NDP sits back in fourth place in seats in the Commons behind the Liberals, Conservatives and Bloc Quebecois, it holds outsized influence through a “supply and confidence” agreement it reached with the minority Liberal government last March, providing support on budgetary bills and in any confidence votes until June 2025.

The party said its announcement of a food inflation critic follows Loblaw Cos., owner of major retail chains such as Loblaws, Superstore and Shoppers Drug Mart, lifting the price freeze it pledged last October on its ‘no name’ food brand. The company said Oct. 17 it would freeze those prices until the end of January.

The NDP said Friday the end of that price freeze is “sparking worry about food prices rising even faster in February.”

Singh, in a separate statement Thursday, specifically called out Loblaw for ending that price freeze, saying the company’s profits “have skyrocketed. They’ve been using inflation as an excuse to hike prices higher than they need to.”

Publicly traded Loblaw releases its fourth-quarter and year-end results for fiscal 2022 on Feb. 23.

For its third quarter, the company on Nov. 16 reported food retail sales of $12.22 billion, marking a 6.9 per cent increase in same-store sales over the year-earlier period, as well as the majority of the company’s $17.39 billion in gross revenue for the quarter, up from $16.05 billion in the previous Q3. — 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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Canada became the first developed nation to legalize use of recreational marijuana in October 2018. It has since also passed a law allowing citizens with a criminal record for marijuana possession to be pardoned quickly and without cost.

Canada’s health minister was required to conduct a review of the legislation, its administration, and operation three years after coming into force, so the review is coming a year later than had been planned.

Health Minister Jean-Yves Duclos said it took longer than expected to begin the review because the government wanted to “make sure things were done right” and plan a review broader than what is mandated by law.

While a study of the law’s safety was a priority, Duclos said the review also would look at Canadian cannabis industry complaints about high taxes, sale limitations and advertising restrictions.

The Canadian Chamber of Commerce welcomed the review, saying its broad scope would help facilitate growth of the legal cannabis sector.

“However, to effectively displace the illicit market and protect the public health and safety of all Canadians, law enforcement, businesses, industry and all levels of government will need to continue to work together,” the chamber’s National Cannabis Working Group said in a statement.

The review will evaluate the law’s impact on young Canadians and progress toward the legislation’s aim of providing adults with access to regulated, lower-risk and legal cannabis products, according to a statement from the government.

It will also analyze what progress has been made in deterring criminal activity and displacing the illicit cannabis market.

Through this review, “we will strengthen the (Cannabis) Act so that it meets the needs of all Canadians while continuing to displace the illicit market,” Duclos said in a statement.

— Reporting for Reuters by Ismail Shakil in Ottawa.

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The pandemic-led trend of cooking at home has sustained even as COVID curbs have eased, continuing to help sales at grocery stores that benefited during last year’s lockdowns.

Companies such as Loblaw — whose retail chains include Loblaws, Superstore, Shoppers Drug Mart, Extra Foods and No Frills — have also benefited from demand for drugs as well as household items and clothing as life returns to normal in many parts of Canada.

Total revenue fell to $12.76 billion in the fourth quarter ended Jan. 1 from $13.29 billion a year earlier. Analysts had expected $12.64 billion, according to IBES data from Refinitiv.

Net earnings available to common shareholders rose to $744 million, or $2.20 per share, in the reported quarter, from $345 million, or 98 cents per share, a year earlier.

— Reporting for Reuters by Ananya Mariam Rajesh in Bangalore.

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