There’s still a lot of uncertainty about the on-again, off-again tariff situation, and so Per Bank, CEO and President of Loblaw Companies Limited, said in a LinkedIn post that he wanted to share some facts seen from his perspective.
“If you saw the latest inflation figures from StatsCan, you’ll know that June grocery prices increased at a slower pace than in May. Hidden within that positive news though, is the fact that tariffs continue to place inflationary pressures on grocery costs. This shows that retailers are generally doing a good job at managing the impacts of these tariffs for Canadians,” he said.
“Inside our business, the consequences of tariffs are being discussed in virtually every supplier meeting we have. So far this year, ~30% of the inflationary cost increases we are seeing are directly linked to tariffs in some way, shape or form.”
A couple of months ago, Bank said he shared that the company expected to have to put a “T” symbol on roughly 6,000 products directly sourced from the United States to help customers navigate impacts from the tariffs.
“Based on our experience since then, that number will move closer to 7,500, as the full effect of tariff countermeasures are felt,” he said. “In the meantime we are still working hard and successful to find new non tariffs impacted suppliers and in Q2 we have added another 70 new suppliers adding up to a hundred new Canadian vendors this year.
“And on average, we’ve seen sales volumes decline by roughly 15%-20% on products marked with a “T”, while volumes on products prepared in Canada increase, demonstrating that the strong desire by consumers to continue supporting Canadian products and brands. Some declines are closer to 50%, where a strong alternative exists on our shelves.
“For the most part, our recent cost negotiations with suppliers have been straightforward and transparent –increases are tabled; any accepted costs directly caused by the tariffs are accepted penny for penny; and tariff-related costs will be eliminated once this situation is resolved. There have been cases where we believe the cost increases are not justified or are meant to take advantage of tariffs over the long-term. In these cases, we strongly push back. We know this is what Canadian consumers expect us to do.
“Like most of you, we want this situation to end fast, and with the least disruption to consumers and suppliers alike. I commend Prime Minister Mark Carney for the Canadian government’s efforts to resolve these U.S.-driven trade issues. In the meantime, I will reiterate we will continue to focus on value, make it easier for our customers to shop Canadian brands and products, and to advocate on their behalf.”
Related Retail Insider stories:
