Canadians will likely experience shortages of some food items and increased prices as the Omicron COVID-19 variant snags supply chains and a vaccine mandate takes effect for cross-border truckers, according to industry experts.
However, they say that Canadians should not worry about food availability and that no one needs to panic buy.
“There is food on the grocery shelves,” said Michelle Wasylyshen, spokesperson for the Retail Council of Canada, which represents big-box grocery stores in the country.
She said, though, that there could be shortages of certain products, such as soups, cereals, fresh fruits and vegetables, and meats.
Some Canadians may have noticed empty shelves recently, but Wasylyshen said that is a result of the winter storm that hit Canada over the previous week.
While weather plays a role in shipment delays, other, long-term issues still persist that has the retail council “concerned,” Wasylyshen said.
These include labour shortages from absenteeism and the Omicron COVID-19 wave, which has caused workers to have to isolate and impacted operations.
Fortunately, both British Columbia and Ontario have said that it appears the peak of the fifth wave of the pandemic has been reached, so more workers are expected to return, Wasylyshen said.
1:53 Alberta grocery stores continue to see more empty shelves as supply chain issues persist
Alberta grocery stores continue to see more empty shelves as supply chain issues persist
Trucker vaccine mandate impact
Another hit likely to impact supply is the COVID-19 vaccine mandate for truckers on both sides of the border.
Canada’s mandate came into effect on Jan. 15, while the U.S.’s did a week later, on Jan. 22.
How great an impact the mandates will have on grocery stores is yet to be seen, but Dalhousie University food distribution professor Sylvain Charlebois said on TheRoy Green Show that Canada imports $21 billion worth of food from the U.S. every year, and 70 per cent of that comes across the border on wheels.
The Canadian Trucking Alliance (CTA) estimates as many as 32,000 Canadian and American cross-border truck drivers may be taken off the roads due to the mandates. That represents 20 per cent of the 160,000 truckers total and is in addition to nearly 23,000 drivers the industry was short before the mandate, according to StatCan and Trucking HR Canada.
“It’s hard to believe that there won’t be any disturbances,” Charlebois said.
Since winter has put a pause on many Canadian crops, we rely heavily on the U.S. for fruits and vegetables, he said, making our food system at this time “way more vulnerable.”
Charlebois said the impact of the mandate on grocery stores will vary.
He said most larger grocery companies operate their own fleets and will likely be fine because they probably already have their own vaccine mandates.
However, smaller grocers may be more affected because they don’t operate their own fleets and are not “huge customers for transportation companies.”
With a reduced amount of drivers, companies will have to choose who gets deliveries, Charlebois said.
Trucking executive Dan Einwechter of Challenger Motor Freight Inc. in Cambridge, Ont., has already sounded the alarm on the mandate, telling Reuters that consumers will see that “there’s not as many choices on the shelves” within two weeks.
1:58 From field to fork, farm groups worry Omicron could impact food production across Canada
From field to fork, farm groups worry Omicron could impact food production across Canada – Jan 7, 2022
However, Gary Sands, senior vice-president at the Canadian Federation of Independent Grocers, which represents about 6,900 businesses across Canada, said some statements from truckers have been alarmist and are “overstating the case.”
“When you walk into grocery stores you might see certain areas are bare, where the product has not yet arrived, but it’s coming,” he said.
He did say that there have been product delays, shortages and some products not arriving at all, and warns that supply shortages are “more acutely felt” in smaller communities.
The trucker vaccine mandate has compounded the issue, Sands said.
When there is less supply but the demand remains the same, it’s almost certain that food prices will increase, Sands said.
He is already seeing price increases of about 25 per cent for fruit and vegetables, and 18-20 per cent for dairy, and warns consumers to definitely not expect any promotions for the time being.
Price increases are necessary to offset the cost of goods beset by labour shortages, as small grocers often face tight margins. If they don’t increase prices, they could go out of business.
“The big watch for consumers in the weeks ahead is just going to be the impact on prices,” Sands said.
2:04 Get ready to pay more at the grocery store in 2022
Get ready to pay more at the grocery store in 2022 – Dec 29, 2021
That increase comes as Canada faces unprecedented inflation, with the country’s inflation rate hitting a 30-year high of 4.8 per cent in December.
Economists have said the vaccine mandate for truckers will keep the prices higher for longer.
Sands doesn’t predict any relief for prices until the pressure on labour decreases, which he said could be helped by more access to rapid test kits to decrease the time workers isolate.
Nevertheless, Sands was hopeful that shortages will be temporary and said there is no reason to panic or stockpile as was seen at the beginning of the pandemic in 2020 when toilet paper was piled high in shopping carts, even if consumers are seeing some bare shelves now.
Instead, Sands recommends shoppers adjust their habits, such as going one week without a certain product like bananas or visiting more than one store.
“This is going to be a bit of a challenge the next three, four, five weeks,” Sands said. “But we’re going to get out of it. The Canadian supply chain is strong.”
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
