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The price of beef and bacon both increased, but food prices overall were up 3.8 per cent.
A woman browses in the fruit section of a store.
The photo was taken by Chris Helgren.
Two of the country's largest supermarket chains said Wednesday that a combination of labour shortages, poor harvests and congested ports is driving up prices and product shortages.
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Cos. is a division of Loblaw Cos. Statistics Canada reported a year-over-year increase in the Consumer Price Index in October, the largest rise since 2003 The price of beef and bacon both increased, but food prices overall increased by 3.8 per cent.
The internal gauge of inflation at the largest food and drug chain in Canada is higher than the consumer price index. Richard Dufresne said suppliers have been trying to negotiate higher prices for their products since the summer.
He said that they try to negotiate the increases down so that they can offer the best value to their customers. We are paying attention to cost inflation.
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Food makers say that everything they do has become more expensive.
Michael Graydon, chief executive at Food, Health and Consumer Products of Canada (FHCP), said that manufacturers can't absorb the significant incremental costs so they have to pass them on to the retailer.
We can't absorb these significant costs so we have to pass them on to the retailer.
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Michael Graydon is a person.
Factories are being forced to offer higher wages to combat an industry-wide labour shortage, while crop yields were down due to the fires in western North America. The cost of commodities went up as a result of tightened supplies.
The recent flooding and mudslides in British Columbia have made it harder for suppliers to get vital inputs, such as packaging, due to supply chain problems.
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Some products have been put on allocation, which is an industry term that means manufacturers allocate a portion of their dwindling supplies to each retailer, rather than filling full orders.
Many of the shortages are in what is known as peripheral product types, which are typically a brand's secondary flavours or packaging sizes. To stay on top of demand, manufacturers try to cut back production on certain products, such as Cool Ranch Doritos, in order to devote more of their resources to making more popular products.
Consumers will be frustrated to see that something is in stock for a week, then out of stock for a few weeks, then back in stock again. Weston said on the call that the consequence of the allocation approach was that. I think we are getting our share of the allocation.
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In the 16 weeks ended Oct. 9, the company earned $488 million on revenues of $16.1 billion.
Its results were better than expected, according to a note to clients from an analyst.
Since public health restrictions on restaurants last year were driving more people to buy groceries and cook at home, same-store sales in food retail were up 0.2 per cent. Higher industry inflation levels helped offset lower eat-at- home trends.
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Weston said that shoppers who stopped going to discount banners during the Pandemic are likely to return.
It made sense for consumers to shop once a week at a full-service banner, such as Loblaws, rather than No Frills. Weston said that discount is starting to make a comeback, and that they expect it to continue as inflation shows up in many aspects of our lives.
Metro chief executive Eric La Flche said continued inflation means shoppers will start trading down, choosing the cheaper cut of meat, picking frozen over fresh, or the store brand over the name brand.
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He said that if inflation is the story for a long period of time, it can happen. We want to stay very competitive and we try to keep our margin rates healthy, but there is clearly inflation out there.
Fourth-quarter sales at Metro were $4.1 billion, a year-over-year decline of 1.2 per cent, which the company blamed on the Pandemic. In the same quarter of the year, sales were up six per cent.
Email: jedmiston@postmedia.
