Loblaw Chief Financial Officer provides commentary on food inflation
"According to the most recent data, inflation in
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
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
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."
Loblaw is
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
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