2 Articles… About Groceries 1) Loblaw, Metro Post Higher Profits and 2) Workers At 17 No Frills Stores In Ontario Set Monday Strike Deadline
1) Loblaw, Metro Post Higher Profits
Courtesy Barrie360.com and Canadian PressPublished: Nov 15th, 2023
By Rosa Saba
More competition is needed in Canada’s grocery sector as consumers grapple with higher food prices, said Finance Minister Chrystia Freeland, after two of the country’s largest grocers reported higher sales and profits in the most recent quarter.
Speaking at a press conference in Mascouche, Que., Freeland said major changes need to be made to Canadian competition law in order to help stabilize food prices.
“We need to bring more competition into the Canadian economy, particularly in the grocery sector,” she said.
“We are prepared to use every tool in our toolbox, including tax policy, to make sure that prices stabilize.”
Freeland’s comments Wednesday came on the heels of financial results from Loblaw Companies Ltd. and Metro Inc.
Loblaw reported a profit for the third quarter of $621 million, up from $556 million during the same quarter last year. Revenues for the quarter rose to $18.27 billion, up from $17.39 billion.
Meanwhile, Metro saw profit for its fourth quarter rise to $222.2 million, up from $168.7 million a year earlier, while sales were $5.07 billion, up from $4.43 billion last year.
As Canadians increasingly look to save on food costs, Loblaw and Metro said they’ve been converting stores to discount banners and are seeing higher sales growth in private-label brands.
“Our Maxi and No Frills stores led the way, generating double-digit growth again this quarter,” chairman Galen Weston said on a conference call with analysts. The company has plans for more new and converted discount stores next year, he said.
The price of groceries has been one of the sharpest thorns in Canadians’ sides amid a broader swell of inflation that peaked last summer.
Inflation has since eased under the weight of interest rate increases from the Bank of Canada, but many Canadians are still grappling with an overall higher cost of living, including rent, mortgage payments and grocery bills.
On Tuesday, Statistics Canada said nearly seven million Canadians struggled with hunger last year. The proportion of families in Canada that reported experiencing food insecurity within the previous 12 months rose 16 per cent between 2021 and 2022.
This fall, the federal government called upon the major grocers to take steps to stabilize food prices and, last month, Industry Minister Francois-Philippe Champagne announced that Loblaw, Metro, Empire, Walmart and Costco had presented their plans, which included discounts and price freezes.
However, Conservative Leader Pierre Poilievre has questioned whether the Liberal government’s pressure on grocers will amount to any real change for consumers.
“This is more political theatre,” he told reporters in September, referring to Champagne’s first meeting with the CEOs of major grocery chains.
In an interview about Loblaw’s financial results, retail analyst Bruce Winder said consumer trust in the major grocers is at an “all-time low.”
The industry is also nearing the completion of a grocery code of conduct meant to provide guidelines for fair dealings between retailers and suppliers.
While grocers have been pointing to large cost increases from major food suppliers as a key factor in rising prices, they have also been criticized over some of the fees they charge to suppliers, which say they have their own rising costs to contend with. Scrutiny of these fees in 2020 helped kickstart work on the grocery code.
Loblaw recently criticized the code, claiming it could add inflationary pressure to grocery prices to the tune of $1 billion in its current form. Members of the steering committee tasked with overseeing the creation of the code disputed Loblaw’s claim, and urged the grocer to give the voluntary code a chance.
Both Loblaw and Walmart Canada have expressed concern about the code, noted Winder, while the other major grocers are on board.
“It’ll be interesting just to see how that plays out,” he said, adding that if the code fails to get traction, there could be pressure on government to step in with regulation.
In a report released in June, the Competition Bureau said more competition in the grocery sector is “a key part of the answer” to keeping food prices down.
“Canada needs solutions to help bring grocery prices in check,” the watchdog said in its report.
The bureau also noted its inability to compel information from the grocery sector for its report limited its access to some details.
In September, the federal government introduced legislation that aims to strengthen the Competition Bureau, including giving it the power to compel information from companies as part of its market studies, as well as to block collaborations that are detrimental to competition and choice.
“Changes to competition law in Canada are really significant,” Freeland said on Wednesday.
“The changes we are proposing are historic and they’re going to make a big difference.”
— With files from Brett Bundale, Hina Alam, Mia Rabson and Nojoud Al Mallees
2) Workers At 17 No Frills Stores In Ontario Set Monday Strike Deadline
Courtesy of Barrie360.com and Canadian PressPublished: Nov 16th, 2023
By Rosa Saba in Toronto
Almost 1,300 workers at 17 No Frills grocery stores in Ontario could be on strike next week, as the union that represents them has set a strike deadline of 12:01 a.m. on Monday.
“Loblaw must come to the table prepared to raise wages and improve working conditions for these grocery store workers,” said Unifor national president Lana Payne in a news release Thursday.
The union said contract talks are ongoing, but that workers are prepared to strike to back their demands.
No Frills is the discount grocery banner owned by Loblaw Cos. Ltd., the largest grocery company in Canada. The 17 stores include the Blake Street No Frills in Barrie, the Bradford store, five locations in Toronto, as well as locations in Whitby, Etobicoke, Niagara Falls and elsewhere.
According to Unifor, six per cent of the workers across the stores are full-time. The rest are part-time, with a quarter being students.
The average hourly wage for the full-time workers is $19.89, while the average hourly wage for the part-time workers excluding the students is $16.95, according to Unifor. The average hourly wage for the students is $15.92.
In Ontario, the minimum wage for students under the age of 18 who work less than a certain number of hours per week is $15.60, compared with the general minimum wage of $16.55.
On Wednesday, Loblaw reported a third-quarter profit of $621 million, up from $556 million during the same quarter last year. The grocer has been expanding its footprint of discount stores like No Frills as consumers trade down, looking for deals amid the rising cost of living.
“Our Maxi and No Frills stores led the way, generating double-digit growth again this quarter,” said chairman Galen Weston on a conference call with analysts Wednesday.
The grocer and its competitors have come under scrutiny for continuing to see profits rise while food inflation soared across the country.
This round of bargaining is the first big round with a major grocery chain for Unifor after it reached a deal with Metro this summer that brought more than 3,700 workers in the Toronto area significant wage gains.
Those workers rejected the first deal their union reached with the employer, then went on strike for five weeks before a second deal was reached.
Unifor had said the Metro deal would help it set a pattern as it bargains with major grocery chains over the next couple of years.
In the press release Thursday, the union said No Frills workers are demanding similar gains to those the Metro workers received.
Workers are fed up with the disparity between their pay and Loblaw’s profits amid the growing cost of living, said Unifor Local 414 president Gord Currie in the release.
“You know it’s bad when workers at Canada’s largest grocery store chain are struggling to afford their own food, even at discount stores like No Frills,” he said.
Files – Barrie 360
STORE LOCATIONS – HTTP://WWW.UNIFOR.ORG
- Ajax: 105 Bayly Street
- Aylmer: 657 John Street North
- Barrie: 319 Blake Street
- Bradford: 305 Barrie Street
- Cobourg: 500 Division Street
- Etobicoke: 220 Royal York Road
- Napanee: 450 Center Street
- Niagara Falls: 6460 Lundy’s Lane
- Oshawa: 1050 Simcoe Street North
- Renfrew: 680 O’Brien Road
- Toronto: 372 Pacific Ave
- Toronto: 1951 Eglinton Avenue West
- Toronto: 1435 King Street West
- Toronto: 449 Parliament Street
- Toronto: 269 Coxwell Ave
- Whitby: 3355 Thickson Road
- Whitby: 920 Dundas Street West
Patricia is the Business Mentor and owner of Grow Vantage and a Past President of the Barrie Chamber of Commerce. She applies over 30 years of business experience (from start-up to corporate) to mentor entrepreneurs. Since 2011, she has held over 6,500 coaching and training sessions in-person and online. Through Ask For Directions Training, her entrepreneurial training program (and parent company Grow Vantage), and as a business coach, she works with start-ups who are new (or who have lost traction) to design, launch and grow their businesses. Along with 20 other expert instructors she teaches strategies in marketing, sales, communications, and finance, as well as practical techniques to increase productivity, and manage their businesses. In other words, everything entrepreneurs need to learn to grow and run their businesses successfully, and avoid the costly mistakes they can't even see coming - that lead to delays in growth and getting stuck.
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