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Loblaw’s decision to freeze prices on all No Name items until January labelled a ‘PR strategy’

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Canada’s biggest grocery chain is freezing prices on all its No Name products for the next three months.

Loblaw Companies Ltd. — which operates such grocery stores as Loblaws, Zehrs, No Frills and Real Canadian Superstore — says it has locked in prices of the popular house brand, which includes more than 1,500 grocery items, until Jan. 31, 2023.

In a letter shared with some of its customers on Monday, Loblaw chairman and president Galen G. Weston says the price of an average basket of groceries is up about 10 per cent this year, with such items as apples, soup and chips up even more.

Weston said much of this is “maddeningly” out of the company’s control as food suppliers pass on higher costs to Loblaw.

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The chain has pushed back against some increases where it can, he said, but suppliers are contending with the same cost increases faced by consumers — with higher prices for everything from raw materials to energy and transportation.

“None of these explanations offer much comfort when you’re worried about your family’s budget and uncertain about how much you’ll need each month to pay for food,” Weston said in a letter to members of the company’s loyalty program, PC Optimum.

Last year, a fight over higher prices briefly saw the company suspend the sale of Frito-Lay products at its stores, before the two sides came to an agreement.

Grocery chains have come under fire for being seen to be making excessive profits at a time when consumers are stretched thin due to rising inflation.

A few years ago, grocery chains including Loblaw, Sobeys, Metro and others took a reputational hit with shoppers when they were found by Canada’s competition watchdog to have been colluding to fix the price of bread and other baked goods for years.

Federal NDP Leader Jagmeet Singh has made grocery store profits a rallying call, noting that the major Canadian chains have taken in $2.3 billion in profit so far this year.

Loblaw’s profits have indeed risen of late, with the company revealing net earnings of $387 million in its most recently completed quarter. That’s up by $12 million from this time last year and by $121 million from the same period in 2019, before the COVID-19 pandemic.

At rival Metro Inc., net earnings came in at $275 million in the most recent quarter, up from $252 million a year ago and $222 million in the same period in 2019.

It’s a similar trend at Empire Co., the owner of Sobeys, which posted net earnings of $187 million in its most recently completed quarter. That was down slightly from $188 million in the same period a year earlier but up from $120 million in the same period pre-pandemic.


Jim Stanford, an economist and director of the research institute Centre for Future Work, said while many Canadian corporations have tried to paint themselves as the victims of inflation, their financial results show that they are in fact contributing to it.

“Corporate profits have soared right alongside consumer prices, and it isn’t a coincidence,” he told CBC News in an interview on Monday. “The evidence is clear that corporations are doing much more than passing on higher costs.”

As a percentage of Canada’s entire GDP, he noted that corporate profits hit an all-time high of almost 20 per cent in the second quarter of this year. While other sectors — notably the energy sector — have seen profits increase at a faster rate, Stanford said, grocers are clearly coming out ahead.

“We should see this as a PR gesture from a company that knows it’s in the eye right now,” he said of Loblaw’s decision to freeze No Name prices.

 

Loblaw Companies Ltd. has announced it will freeze the price of all No Name items for the next three months, a move that drew mixed reaction from shoppers on the streets of Toronto on Monday.

Others say it’s unfair to suggest that grocery chains in particular have been gouging consumers. Trevor Tombe, an economist at the University of Calgary, recently crunched the numbers on corporate profits and said he didn’t find much evidence of undue profiteering in that sector specifically.

“The profit levels are up because of volumes, not because of price markup increases,” he said in an interview.

“The higher profits that we’re seeing are largely driven by high commodity prices and high energy, oil and gas prices in particular. So that’s causing both inflation to increase and profits to increase.”

Marion Chan, a principal with TrendSpotter consultancy, says the move makes sense for Loblaw as it’s an opportunity to gain customers on items for which pricing tends to matter more than branding.

“They’re very willing to make the trade-offs and go to a known name product or a or a private label product as it may be to save some money,” she said in an interview. “There’s a wide range of reasons why people are brand loyal but [they] hit a cap at a certain point where they say, no,  I just can’t spend.”

Similar moves in other countries

The decision by Loblaw to freeze prices of the private label brand with its distinctive yellow-and-black packaging follows similar announcements by grocers in other countries.

In August, French supermarket chain Carrefour announced plans to freeze prices on about 100 of its house-brand products until Nov. 30.

In June, Lidl’s U.S. arm introduced a summer price-cutting campaign to ease the inflationary burden on customers. The company said it dropped prices on more than 100 items in its stores across nine East Coast states until August.

“We’ve seen grocers voluntarily freezing prices across the G7 for a while now,” said Sylvain Charlebois, professor of food distribution and food policy at Dalhousie University in Halifax. “It should have happened a long time ago in Canada.”

Still, freezing No Name prices will offer much-needed relief to Canadians, he said, adding it will also help to repair some of the image issues facing Canada’s big grocers, Charlebois said.

“This is also a PR strategy…. A lot of Canadians are blaming grocers for what’s going on with food inflation,” he said. “Some of it is deserved … but much of that criticism is unfair because food prices can rise for a variety of reasons beyond a grocer’s control.”

Mike von Massow, an associate professor in the food, agricultural and resource economics department at the University of Guelph, said it’s no accident that Loblaw has decided to cap price hikes on the brand that it owns, because it has the power to control all parts of the supply chain.

“They control the brand, they can control much more of the margin of that product — and they may well have locked in the prices and mitigated a good bit of their risk going forward,” he said in an interview. “Are they going to lose substantial amounts of money on this, on this commitment? Probably not.”

While the company’s move has a lot to do with public relations, von Massow said, it is likely going to help people who need it most, because it’s targeting staple items where there are very few ways of avoiding price increases. “There is a real chance that costs will continue to go up over the coming months, and this gives people some certainty now,” he said.

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Calgary breaks all-time record in housing starts but increasing demand keeps inventory low – CBC.ca

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Soaring housing demands in Calgary led to an all-time record for new residential builds last year, but inventory levels of completed and unsold units remained low due to demand outpacing supply.

According to the latest report from Canada Mortgage and Housing Corporation (CMHC), total housing starts increased by 13 per cent in Calgary, reaching a total of 19,579 units with growth across all dwelling types in the city.

That compares to a decline of 0.5 per cent overall for housing starts in the six major Canadian cities surveyed by CMHC.

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Calgary also had the highest housing starts by population.

“Part of the reason why we think that might have happened is that developers are responding to low vacancies in the rental market,” said Adebola Omosola, a housing economics specialist with CMHC.

“The population of Calgary is still growing, a record number of people moved here last year, and we still expect that to remain at least in the short term.”

Earlier this year, the Calgary Real Estate Board also predicted that demand, especially for rental apartments, wouldn’t let up any time soon. 

Industry can cope with demand, expert says

According to numbers from the report, average construction times were higher in 2023 for all dwelling types except for apartments.

The agency’s report suggests the increase in the number of under-construction residential projects might mean builders are operating at or near full capacity.

However, there’s optimism the construction industry can match the increasing need.

Brian Hahn, CEO of BILD Calgary Region, said despite concerns around about construction costs, project timelines and labour shortages, the industry has kept up with the demand for new builds.

Demand is expected to remain robust, but the construction industry can keep up, according to BILD Calgary region CEO Brian Hahn.
Demand is expected to remain robust, but the construction industry can keep up, according to BILD Calgary Region chief executive officer Brian Hahn. (Shaun Best/Reuters)

“I’ve heard that kind of conversation at the end of 2022 and I heard it in 2023,” Hahn said.

“Yet here we are early in 2024, and January and February were record numbers again.”

Hahn added he believes the current pace of construction will continue for at least the next six months and that the industry is looking at initiatives to attract more people to the trades.

Increase in row house and apartment construction

Construction growth was largely driven by new apartment projects, making up almost half of the housing starts in Calgary in 2023.

The federal housing agency says 9,034 apartment units were started that year, an increase of 17 per cent from the previous year. Of those, about 54 per cent were purpose-built rentals.

Apartments made up around two-thirds of all units under construction, CMHC said, with the total number of units under construction reaching 23,473.

Growth, however, was seen across all dwelling types. Row homes increased by 34 per cent from the previous year while groundbreaking on single-detached homes grew by two per cent.

“Notwithstanding challenges, our members and the industry counterparts that support them managed to produce a record amount of starts and completions,” Hahn said.

“I have little doubt that the industry will do their very best to keep pace at those levels.”

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Ottawa real estate: House starts down, apartments up in 2023 – CTV News Ottawa

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Rental housing dominated construction in Ottawa last year, according to a new report from the Canada Mortgage and Housing Corporation (CMHC).

Residential construction declined significantly in 2023, with housing starts dropping to 9,245 units, a 19.5 per cent decline from the record high observed in 2022. But while single-detached and row housing starts fell compared to 2022, new construction for rental units and condominiums rose.

“There’s been a shift toward rental construction over the past two years. Rental housing starts made up nearly one third of total starts in 2023, close to double the average of the previous five years,” the report stated.

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Apartment starts reached their highest level since the 1970s.

“The trend toward rental and condominium apartment construction follows increased demand in these market segments due to population growth, households looking for affordable options, and some seniors downsizing to smaller units,” the CMHC said.

Demand from international migration and students, the high cost of home ownership, and people moving to Ottawa from other parts of Ontario were the main drivers for rental housing starts in 2023. The CMHC says rental and condominium apartment starts made up 63 per cent of total starts in 2023, compared to the average of 37 per cent for the period 2018-2022.

There was a modest increase in rental housing starts in 2023 over the record-high seen the year prior and a jump in new condominiums. The report shows 5,846 new apartments were built in Ottawa last year, up 2.1 per cent compared to 2022.

Housing starts in Ottawa by year. (CMHC)

Big demand for condos

The CMHC said condo starts reached a new high in 2023, increasing 3 per cent from 2022 numbers.

“As of the end of 2023, there were only 13 completed and unsold condominium units, highlighting continued demand for new units,” the CMHC said.

Condominum starts increased in areas such as Chinatown, Hintonburg, Vanier and Alta Vista, as well as some suburban areas like Kanata, Stittsville, and western Orléans. Condo apartment construction declined in denser parts of the city like downtown, Lowertown and Centretown, the report says.

Taller buildings are also becoming more common, as the cranes dotting the skyline can attest. The CMHC notes that buildings with more than 20 storeys accounted for nearly 10 per cent of apartment structure starts in 2022 and 2023, compared to an average of 2 per cent over the 2017-2021 period. The number of units per building also rose 7 per cent compared to 2022.

Apartment building heights in Ottawa by year. (CMHC)

Single-detached home construction down significantly

The number of new single-detached homes built in Ottawa last year was the lowest level seen in the city since the mid 1990s, CMHC said.

“The Ottawa area experienced a slowdown in residential construction in 2023, driven by a significant decline in single-detached and row housing starts,” the CMHC said.

Single-detached housing starts were down 45 per cent compared to 2022. Row house starts dropped by 38 per cent compared to 2022, marking a third year of declines in a row.

“Demand for single-detached and row houses also declined in 2023. Higher mortgage rates and home prices have led to a shift in demand toward more affordable rental and condominium units,” the report said.

There were 1,535 single-detached housing starts in Ottawa last year, 208 new semi-detached homes and 1,678 new row houses.

The majority of single-detached and row housing starts were built in suburban communities such as Barrhaven, Stittsville, Kanata, Orléans and rural parts of the city.

“Increased construction costs resulting from higher financing rates and inflation that occurred in 2022 and 2023 contributed to the decline in construction in the region,” the CMHC said. 

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Trump’s media company ticker leads to fleeting windfall for some investors

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A man looks at a screen that displays trading information about shares of Truth Social and Trump Media & Technology Group, outside the Nasdaq Market site in New York City, U.S., March 26.Brendan McDermid/Reuters

Possible confusion over the new stock symbol for former President Donald Trump’s Truth Social (DJT-Q) saw some investor brokerage balances briefly jump by hundreds of thousands of dollars on Tuesday, the first day Trump’s “DJT” ticker traded.

Several people complained on social media about briefly seeing the value of their DJT stock holdings on Charles Schwab platforms inflated to figures more in line with what they would be worth if the shares traded at the level of the Dow Jones Transportation Average.

Some users said they faced a similar issue in pre-market hours on Morgan Stanley’s E*Trade trading platform.

Shares of Trump Media & Technology Group opened Tuesday at $70.90, while the Dow Jones Transportation Average started the session at 15,937.73 points.

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For one trader, the Schwab brokerage balance jumped by more than $1 million due to the error, according to a screen grab shared on social media platform X. Reuters was unable to contact the trader or independently verify the brokerage balance.

“It sure was nice seeing millions in the account, even if it wasn’t real,” another person, going by the username @DanielBenjamin8, who faced the issue in his E*Trade account, posted on X.

Two X users and one on Reddit surmised that the inflated balances were due to the ticker symbol for the company being nearly identical to the index.

A spokeswoman for Charles Schwab said that certain users on some of Schwab’s trading platforms saw their brokerage balances briefly inflated due to a technical issue.

The issue has been resolved and investors are able to trade equities and options on Schwab platforms, she said. Schwab declined to describe the exact cause of the issue.

E*Trade did not immediately respond to a request for comment outside of regular business hours.

Trump Media & Technology Group and S&P Dow Jones Indices, which maintains the Dow Jones Transportation Average Index, did not immediately comment on the issue.

While social media users said the issue appeared to have been resolved, many rued not being able to cash out their supposed gains from the error.

“I better go tell my boss that I’m actually not retiring,” the trader whose account balance had briefly jump by more than $1 million, wrote on X.

Trump Media & Technology Group shares surged more than 36% on Tuesday in their debut on the Nasdaq that comes more than two years since its merger with a blank-check firm was announced.

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