Loblaw earns $529M in Q4 profits as Canadians continue to be hit with higher food prices - CBC News | Canada News Media
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Loblaw earns $529M in Q4 profits as Canadians continue to be hit with higher food prices – CBC News

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Loblaw Companies on Thursday forecast annual earnings above analysts’ expectations, after the Canadian retailer’s fourth-quarter results beat estimates, helped by strength in its pharmacy business and as demand held up for groceries.

The company says it earned a profit available to common shareholders of $529 million. Its fourth-quarter revenue rose about 10 per cent to $14.01 billion, topping estimates of $13.75 billion.

On an adjusted basis, Loblaw earned $1.76 per share, beating analysts’ expectations of $1.71 per share.

Consumers spending on essentials

The cooking oil aisle at a Toronto Loblaws grocery store is pictured on Oct. 18, 2022. Retailers are leaning on sales of food and medicines as rising prices are forcing consumers to prioritize spending on essentials and trade down to cheaper private-label alternatives from higher-priced brands. (Evan Mitsui/CBC)

Retailers are leaning on sales of food and medicines as rising prices are forcing consumers to prioritize spending on essentials and trade down to cheaper private-label alternatives from higher-priced brands.

Loblaw posted a 9.7 per cent rise in retail segment sales, reflecting strong growth in its food and drug businesses, with steady demand for cough and cold medicines, as well as high-margin beauty and cosmetics products.

Retail bellwether Walmart Inc., however, forecast its full-year earnings below estimates on Tuesday, and warned that tight spending by consumers could pressure profit margins.

Loblaw, on the other hand, expects its full-year 2023 adjusted earnings per common share to grow in the low double-digits compared with the average analyst estimate of 9.64 per cent, according to Refinitiv IBES data.

A lack of competition

Groceries are pictured in a Vaughan, Ont., supermarket on Aug. 16, 2022. Several converging factors are putting upward pressure on food costs, including geopolitical events like the war in Ukraine, as well as climate-related disasters like a surge of avian flu in North America that is driving up poultry prices. (Evan Mitsui/CBC)

Dr. Phoebe Stephens, an assistant professor of food security and sustainable agriculture at Dalhousie University, said that grocery retail in Canada is heavily concentrated, with about 80 per cent of sales controlled by five major chains, including Loblaw.

“Whether or not greedflation is at play is really, really difficult to nail down,” Stephens said, noting that food processing and manufacturing are also heavily concentrated parts of the sector.

“So there is a lack of competition there as well. And that might be allowing these companies to raise prices more so than they would be able to if there was greater competition.”

Several converging factors are putting upward pressure on food costs, including geopolitical events like the war in Ukraine, as well as climate-related disasters like a surge of avian flu in North America that is driving up poultry prices.

“But there is also a question mark about the role of market concentration and a lack of competition in driving up these food prices,” Stephens said. “Because of their unique position in the food system, grocery retailers actually have power over both suppliers and consumers.”

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Bimbo Canada closing Quebec City bakery, affecting 141 workers

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MONTREAL – Bakery company Bimbo Canada says it’s closing its bakery in Quebec City by the end of the year, affecting about 141 workers.

The company says operations will wind down gradually over the next few months as it moves production to its other bakeries.

Bimbo Canada produces and distributes brands including Dempster’s, Villaggio and Stonemill.

It’s a subsidiary of Mexico-based Grupo Bimbo.

The company says it’s focused on optimizing its manufacturing footprint.

It says it will provide severance, personal counselling and outplacement services to affected employees.

This report by The Canadian Press was first published Sept. 19, 2024.

The Canadian Press. All rights reserved.



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NDP to join Bloc in defeating Conservatives’ non-confidence motion

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OTTAWA – The New Democrats confirmed Thursday they won’t help Pierre Poilievre’s Conservatives topple the government next week, and intend to join the Bloc Québécois in blocking the Tories’ non-confidence motion.

The planned votes from the Bloc and the New Democrats eliminate the possibility of a snap election, buying the Liberals more time to govern after a raucous start to the fall sitting of Parliament.

Poilievre issued a challenge to NDP Leader Jagmeet Singh earlier this week when he announced he will put forward a motion that simply states that the House has no confidence in the government or the prime minister.

If it were to pass, it would likely mean Canadians would be heading to the polls, but Singh said Thursday he’s not going to let Poilievre tell him what to do.

Voting against the Conservative motion doesn’t mean the NDP support the Liberals, said Singh, who pulled out of his political pact with Prime Minister Justin Trudeau a few weeks ago.

“I stand by my words, Trudeau has let you down,” Singh said in the foyer outside of the House of Commons Thursday.

“Trudeau has let you down and does not deserve another chance.”

Canadians will have to make that choice at the ballot box, Singh said, but he will make a decision about whether to help trigger that election on a vote-by-vote basis in the House.

The Conservatives mocked the NDP during Question Period for saying they had “ripped up” the deal to support the Liberals, despite plans to vote to keep them in power.

Poilievre accused Singh of pretending to pull out of the deal to sway voters in a federal byelection in Winnipeg, where the NDP was defending its long-held seat against the Conservatives.

“Once the votes were counted, he betrayed them again. He’s a fake, a phoney and fraud. How can anyone ever believe what the sellout NDP leader says in the future?” Poilievre said during Question Period Thursday afternoon.

At some point after those comments, Singh stepped out from behind his desk in the House and a two-minute shouting match ensued between the two leaders and their MPs before the Speaker intervened.

Outside the House, Poilievre said he plans to put forward another non-confidence motion at the next opportunity.

“We want a carbon-tax election as soon as possible, so that we can axe Trudeau’s tax before he quadruples it to 61 cents a litre,” he said.

Liberal House leader Karina Gould says there is much work the government still needs to do, and that Singh has realized the consequences of potentially bringing down the government. She refused to take questions about whether her government will negotiate with opposition parties to ensure their support in future confidence motions.

Bloc Québécois Leader Yves-François Blanchet hasn’t ruled out voting no-confidence in the government the next time a motion is tabled.

“I never support Liberals. Help me God, I go against the Conservatives on a vote that is only about Pierre Poilievre and his huge ambition for himself,” Blanchet said Thursday.

“I support the interests of Quebecers, if those interests are also good for Canadians.”

A Bloc bill to increase pension cheques for seniors aged 65 to 74 is now at “the very centre of the survival of this government,” he said.

The Bloc needs a recommendation from a government minister to OK the cost and get the bill through the House.

The Bloc also wants to see more protections for supply management in the food sector in Canada and Quebec.

If the Liberals can’t deliver on those two things, they will fall, Blanchet said.

“This is what we call power,” he said.

Treasury Board President Anita Anand wouldn’t say whether the government would be willing to swallow the financial implications of the Bloc’s demands.

“We are focused at Treasury Board on ensuring prudent fiscal management,” she said Thursday.

“And at this time, our immediate focus is implementing the measures in budget 2024 that were announced earlier this year.”

This report by The Canadian Press was first published Sept. 19, 2024.



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Anita Anand sworn in as transport minister after Pablo Rodriguez resigns

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OTTAWA – Treasury Board President Anita Anand has been sworn in as federal transport minister at a ceremony at Rideau Hall, taking over a portfolio left vacant after Pablo Rodriguez resigned from cabinet and the Liberal caucus on Thursday.

Anand thanked Rodriguez for his contributions to the government and the country, saying she’s grateful for his guidance and friendship.

She sidestepped a question about the message it sends to have him leave the federal Liberal fold.

“That is a decision that he made independently, and I wish him well,” she said.

Prime Minister Justin Trudeau was not present for the swearing-in ceremony, nor were any other members of the Liberal government.

The shakeup in cabinet comes just days after the Liberals lost a key seat in a Montreal byelection to the Bloc Québécois and amid renewed calls for Prime Minister Justin Trudeau to step down and make way for a new leader.

Anand said she is not actively seeking leadership of the party, saying she is focused on her roles as minister and as MP.

“My view is that we are a team, and we are a team that has to keep delivering for our country,” she said.

The minority Liberal government is in a more challenging position in the House of Commons after the NDP ended a supply-and-confidence deal that provided parliamentary stability for more than two years.

Non-confidence votes are guaranteed to come from the Opposition Conservatives, who are eager to bring the government down.

On Thursday morning, Rodriguez made a symbolic walk over the Alexandra Bridge from Parliament Hill to Gatineau, Que., where he formally announced his plans to run for the Quebec Liberal party leadership.

He said he will now sit as an Independent member of Parliament, which will allow him to focus on his own priorities.

“I was defending the priorities of the government, and I did it in a very loyal way,” he said.

“It’s normal and it’s what I had to do. But now it’s more about my vision, the vision of the team that I’m building.”

Rodriguez said he will stay on as an MP until the Quebec Liberal leadership campaign officially launches in January.

He said that will “avoid a costly byelection a few weeks, or months, before a general election.”

The next federal election must be held by October 2025.

Conservative Leader Pierre Poilievre said he will try to topple the government sooner than that, beginning with a non-confidence motion that is set to be debated Sept. 24 and voted on Sept. 25.

Poilievre has called on the NDP and the Bloc Québécois to support him, but both Jagmeet Singh and Yves-François Blanchet have said they will not support the Conservatives.

Rodriguez said he doesn’t want a federal election right away and will vote against the non-confidence motion.

As for how he would vote on other matters before the House of Commons, “it would depend on the votes.”

Public Services and Procurement Minister Jean-Yves Duclos will become the government’s new Quebec lieutenant, a non-cabinet role Rodriguez held since 2019.

This report by The Canadian Press was first published Sept. 19, 2024.

— With files from Nojoud Al Mallees and Dylan Robertson

The Canadian Press. All rights reserved.



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