While the tariff situation might be improving between the U.S. and other countries, that’s not yet the case here in Canada. In fact, we’ll be facing a large wave of tariff-related increases in the weeks ahead, warns Per Bank, CEO & President, Loblaw Companies Limited.
“Our customers might have seen a “T” symbol on our shelf labels, which indicated that a product has been impacted by tariffs. So far, we’ve been able to limit the number of T symbols on our shelves to a little over 1,000 items. But our inventory is running out, and in the next week or two, the number of products with a T symbol will surge to over 3,000. Within the next two months, that number could peak at over 6,000,” wrote Bank in a LinkedIn post.
“On average, our store portfolio combined carry roughly 80,000 items. So while the majority of products will be unaffected, customers will start to see more impacts in non-produce categories like natural foods, pantry staples, health & beauty products, and more.
“It’s been good to see Prime Minister Carney and other leaders engaging in dialogue with U.S. officials, as we’re all hoping for a rapid de-escalation of this situation. We were also pleased to see the change in policy, where only finished food products from the U.S. are subject to tariffs.
“In the meantime, customer decisions continue to shift. In this photo, for example, we see customers choosing PC orange juice made with oranges from Brazil over the national brand product sourced from the U.S. Sometimes, but rarely, it will be the reverse, where our control brand products are affected… as about 4% of our control brand products are sourced from the U.S.
“Needless to say, this situation continues to evolve. We’ll continue to do our best to help customers make informed decisions and in cooperation with our vendors to look for more Canadian and non U.S produced products where at all possible.”
In April, the Loblaw April Food Inflation Report said that while the impact of Canada’s counter tariffs was minimal on food prices in March, as retailers sell through existing inventories higher prices will begin appearing on shelf.
“While currently on pause, the tariffs the U.S. has threatened to impose on dozens of countries could indirectly impact food prices here in Canada. Coffee, already facing higher than normal prices due to a poor growing season, is one example. Many U.S. coffee producers import their beans from Vietnam (the second largest producer after Brazil), which could attract a 46% tariff. After roasting and packaging in the U.S., that finished product is sent to Canada, where an additional 25% tariff exists upon entry. As a result, every $1 spent on coffee previously could conceptually cost as much as $1.82 after tariffs,” explained Loblaw.
Related Retail Insider stories:
It’s time for a change to the Supply chain. Route the beans from Vietnam directly to Canada, bypassing the United States. Roast and package in Canada. Although this is in simplistic terms, I recognize there’s significant work to establish these new routes. Once the new routes are established, I doubt they’ll return to the US channels even if Trump removes the tariffs; the trust is lost.
I suspect there are roasters in Canada who would jump at the chance for this additional business.