Loblaw freezing food prices through the lucrative holiday season is surprising: Sylvain Charlebois
All eyes will be on Canada’s other major grocers to see if they respond to Loblaw Companies Ltd.’s price freeze on No Name products with similar moves, said Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University.
“It'll be interesting to see how Loblaws’ competition, Empire’s Sobeys Inc. and Metro namely, are going to be reacting to this because on Wednesday, Statistics Canada will come out with new inflation numbers,” Charlebois said in an interview Monday.
“And again, grocers will face a barrage of criticism once again.”
Statistics Canada is set to release the latest read on Canadian inflation this Wednesday. In August, inflation eased for a second month amid lower gasoline prices, but food costs rose at its fastest pace in August since 1981.
On Monday, Loblaw announced it would lock in prices for its brand No Name, which offers more than 1,500 grocery items. The company said the price freeze will last until Jan. 31.
In a statement to BNN Bloomberg, a Metro Inc. spokesperson said it’s normal to have a price freeze during this time period.
“It is an industry practice to have a price freeze from November 1 to February 5 for all private label and national brand grocery products and this will be the case in all of METRO banners (in Ontario, Metro, Food Basics Ltd., Marché Adonis),” the spokesperson said over email on Monday.
“There may be a few price increases received prior to October 31 that will appear on the shelf, but no price increases thereafter.”
Sobeys’ parent company Empire has not replied to BNN Bloomberg’s request for a comment on whether they will be implementing a price freeze.
While Loblaw isn’t the first grocer to halt price increases, Charlebois said this could mark one of the largest campaigns in the world.
He said the biggest price freeze campaign he’s seen to-date was from a France-based grocer that halted the prices of 300 products.
SOME CONSUMERS QUESTION PRICE GOUGING
Charlebois flagged that this announcement by Loblaw comes at a time when Canada’s big three supermarket chains face a parliamentary inquiry.
The House of Commons agriculture committee voted on Oct. 5 to call on the three grocery chains’ chief executive officers to testify on why “the cost of groceries [is] going up, while large chains are making profits.”
“All of these grocers are going to be summoned by Ottawa to testify,” Charlebois said.
“So Loblaw now has an answer (to higher prices), it'll be interesting to see exactly what answers are going to be provided by both Empire (Sobeys’ parent company) and Metro.”
A survey also released by the Bank of Canada on Monday found that Canadians’ views on food inflation are becoming more divided.
“Views on domestic factors affecting inflation are now more polarized, and some people think high government spending and price gouging by domestic retailers are also playing a role,” it said in the Canadian Survey of Consumer Expectations—Third Quarter of 2022.
“Results of follow-up interviews indicate that some see high inflation as pervasive, with no declines in the prices of food or other products.”
SAVING ON CHRISTMAS DINNER
Charlebois said he was surprised at the timing of the No Name price freeze announcement.
“This campaign includes the very lucrative holiday season,” Charlebois said.
“Grocers take a lot of money during the holidays, so basically Loblaw is offering a safe place for consumers to go if they're looking for deals.”
He also said the campaign will end right before the Canadian Dairy Commission will be implementing its next price hike for dairy.
Canadian milk prices will be going up around 2.2 per cent on Feb. 1.