Industry Minister Francois-Philippe Champagne says he wishes Canadian grocers would be more forthcoming with the public about their plans to stabilize prices.
Earlier this month, Champagne announced that major Canadian grocers — Loblaw, Metro, Empire, Walmart and Costco — submitted initial plans to the federal government for how they will stabilize prices in the face of high inflation.
The Liberal government summoned the heads of the companies to meet in Ottawa last month, demanding they present such a plan by Thanksgiving or face potential tax measures.
At the announcement on Oct. 5, Champagne said those plans included discounts, price freezes and price-matching campaigns. He didn’t divulge many details at the time, saying he wanted the grocers to compete with one another.
But in an interview with The Canadian Press on Monday, Champagne said he wishes the grocers were willing to be more open.
“I wish they would be more forthcoming,” Champagne said. “They’ve been outlining to us the kind of things (they) intend to do, but I think they have perhaps historically been different in how they approach the market. They say, ‘We’re going to tell the market when we do it,’ but they are a bit concerned of telling in advance what they’re going to do.”
The issue of affordability — especially when it comes to housing and the cost of food — has been dominating political discourse for months, with both the Conservatives and NDP demanding the Liberal government do more to help Canadians struggling to pay the bills.
Grocery prices have risen in Canada at a faster rate than overall inflation, although they have also risen dramatically around the world. Many countries have seen food prices rise faster than in Canada.
Support for the Conservatives, who have focused heavily on that issue for months, has also been rising in the polls, at the expense of the Liberals.
The decision to pressure grocers to tackle rising prices was one of several affordability measures announced by Prime Minister Justin Trudeau after a Liberal caucus retreat in September.
“During the summer, I think all of us went out and listened to Canadians about everywhere. And it became very clear when we met at our retreat with caucus that what we heard from Canadians was really around housing and around affordability,” Champagne said.
But the opposition has not welcomed the approach to the problem.
The Conservatives have been hammering the Liberals over the cost of groceries, blaming the prime minister for these price increases due to his government’s “deficit spending.”
NDP Leader Jagmeet Singh has said the Liberal government’s “plan to ask CEOs nicely to reduce prices is ridiculous.”
Still, it remains unclear what else Champagne could do, given groceries, unlike telecommunications, are not a federally regulated industry.
The lack of details from the grocers themselves does not add clarity.
The Canadian Press reached out to the grocers last week to request more details on their pledges to the federal government. Loblaw and Costco did not respond and Metro declined to comment. A spokeswoman for Walmart said the company promised to continue offering “everyday low prices,” which refers to its strategy of offering low prices on a regular basis, rather than on promotion only.
Meanwhile, a spokeswoman for Sobeys, which is owned by Empire, responded on Friday to say the company isn’t disclosing its plan for competitive reasons.
“Our plans are competitively sensitive and we do not plan to discuss them before they are launched in our stores,” said Karen White-Boswell, Empire’s director of external communications.
That is in contrast to the way a similar situation has played out in Europe over the last year.
In the U.K., grocery giant Asda announced in June its plans to freeze prices on 500 products until the end of August. The French government reached a three-month agreement with supermarket chains earlier this year for them to cut prices on hundreds of staples and other foods.
Although Champagne has regularly pointed to these countries as examples to follow, he said Canadian grocers aren’t used to government intervention, and calling them into a meeting in Ottawa was already a big step for the federal government to take.
“We’re shaking the tree,” Champagne said. “This is not a regulated industry (like) telecom where they’re used to working with government to achieve outcomes.”
The Liberals have said getting grocers to stabilize prices is a way of taking immediate action to address people’s financial anxieties, but Champagne acknowledged during the interview that the solution to high grocery prices, in the long run, depends on competitive forces.
“(The) bottom line is that three companies in Canada, three large grocers, control more than 60 per cent of the market. And the best way to address that and stabilize prices over the mid- to long-term is to create more competition,” Champagne said.
The Liberals have also introduced legislation that would make several changes to the country’s competition law, including empowering the Competition Bureau to go after anticompetitive collaborations, such as real estate agreements that prohibit a competitor from opening shop nearby.
The federal government has long pledged a broader overhaul of the Competition Act, something many experts are hoping for as well.
Champagne said reform is going to happen, though he wouldn’t say when.
This report by The Canadian Press was first published Oct. 17, 2023.
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.
