Nova Scotia Journal

Tuesday, December 7, 2021

Supply and Inflation chain issues are affecting the Canada’s grocery industry

Canada's grocery industry

Key Takeaways:

  • As food manufacturers grapple with rising costs also supply chain issues, two of Canada’s largest grocers are indicating the possibility of higher prices and sporadic availability of some products in the coming months.
  • On Wednesday, Loblaw Companies Ltd. and Metro Inc. released their most recent financial results, providing insight into the grocery industry’s inflationary pressures and labour challenges.

The situation is expected to result in higher food prices and temporary shortages of specialty products on store shelves, implying that the pandemic may impact the food industry long-term.

“There are meaningful commodity price pressures and then there is labour supply pressure,” said Galen G. Weston, president and chairman of Loblaw, during a conference call with analysts. “These two factors are posing significant challenges to our manufacturing base.”

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Manufacturers, according to Weston, are consolidating production into the highest volume products and allocating secondary sizes and flavors, managing limited supplies by limiting retailers to finite amounts of some products.

Loblaws Companies Ltd.

“What customers will be irritated by is seeing something in stock for a week and then out of supply for four or five weeks,” Weston said, adding that he expects the inconsistency to persist for a few more quarters. The crisis is affecting Canada’s whole grocery industry. He explained, “There are some key items where we are on allocations.” “It’s the entire industry.”

The pandemic’s continued effects are expected to affect more than simply grocery store counters. Food producers’ expenses are rising due to rising labour, shipping, and commodity costs, and many consumer packaged goods companies are pursuing price hikes.

Meanwhile, Metro reported a higher fourth-quarter profit than a year before, despite decreased sales.

The Montreal-based supermarket and drugstore chain reported a profit of $194 million, or 79 cents per reduced share, for the 12 weeks ended September. 25, up from $186.5 million, or 74 cents per share, a year ago. According to the company, sales added $4.09 billion, down from $4.14 billion in the same point last year when the company reported exceptionally high sales owing to the epidemic.

Source: rmotoday news

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