One of Burnaby’s biggest grocery and drug retailers is reporting that profits have surged at its stores across the country at a time when inflation is pushing prices to sky-high levels.
Loblaw Companies Ltd. operates Real Canadian Superstore at Metropolis at Metrotown, as well as multiple Shoppers Drug Mart stores in Burnaby and the Wholesale Club on Kingsway in the Metotown area.
On Wednesday, the company reported that during the quarter ended March 26, its profit available to common shareholders totalled $437 million or $1.30 per diluted share for the 12-week period compared with $313 million or 90 cents per diluted share a year earlier for a $124 million increase.
Drug retail same-store sales grew 5.2%, with pharmacy same-store sales up 6.8% and front store same-store sales increasing 3.6%.
Food retail same-store sales rose 2.1%, benefiting from higher than normal eat-at-home levels, the company said. Revenue for the quarter totalled $12.26 billion, up from $11.87 billion in the same quarter last year.
This comes as food prices increased by 7.7% year over year in March – the highest annual rate of food inflation since March 2009, according to Statistics Canada.
Price hikes with many grocery retailers resulted from global supply-chain disruptions that increased input costs and shipping rates for growers and manufacturers. Those producers then passed those costs on to consumers to make their businesses viable.
Unfavourable growing conditions reduced farm output in parts of the world, leading to higher prices because there was less supply to meet steady demand.
Loblaw said that rising prices have pushed many shoppers to find discount options.
"After President's Choice, our No Name brand is the second largest (private label brand) in the country," Loblaw chairman and president Galen G. Weston said during a conference call.
"Through the promise of excellent products at incredibly low prices, sales are at all-time highs," he said. "This is an indication of the Canadian consumers' steadily increasing focus on value."
Here is a snapshot of how food prices have gone up.
Prices for fresh or frozen beef increased 12.1 per cent in March compared with the same month in 2021, according to Statistics Canada.
COVID-19-related production plant shutdowns were to blame for part of that increase.
Poultry prices rose 6.8 per cent year over year in March, according to Statistics Canada. Price hikes for chicken were slightly higher: 7.4 per cent in that same time period.
Poultry is supply-managed in Canada to stabilize prices, but grocers are still able to charge higher prices to meet consumer demand.
Prices for dairy products and eggs increased 8.5 per cent in March compared with the same month in 2021, according to Statistics Canada.
Within that category, butter prices jumped the most: up 16 per cent.
Fresh fruit prices were up nine per cent in March compared with a year earlier.
Fresh vegetable prices increased by 4.6 per cent in March compared with a year earlier.
Higher prices for produce vegetables come from increased input costs such as fertilizer and labour.
Oil prices were recently higher than they had been since mid-2009. That increases shipping costs.
Price increases for packaged foods have followed the overall inflationary trend. Prices for sugar, chocolate, oil, coffee, spices and other products increased nine per cent in March compared with the same month a year ago, according to Statistics Canada.
- With additional reporting by the Canadian Press and Glen Korstrom, Business in Vancouver