The food going into grocery store shopping carts in Canada is changing as many consumers struggle to afford basics amid a nearly 10 per cent increase in food costs, the head of one of the country's largest supermarket chains said Wednesday.
“We are seeing double digit rates of inflation on basic commodities like eggs, flour and meat,†Michael Medline, president and CEO of Empire and Sobeys, said during an earnings call.
“Customers simply won't and often cannot accept cost increases at some of the extreme levels we're seeing ... the reality is that a lot of Canadians are struggling under the weight of inflation.â€
Customers are shopping around more, reducing impulse buys by sticking to shopping lists, and trading down from higher-cost items to more affordable products or brands, he said.
They're also looking for more sales and, at times, buying less overall.
“People only have so much money,†Medline said. “They have to make harder choices. Periods of high inflation are terrible for Canadians.â€
Both Loblaw Companies Ltd. and Metro Inc. shared similar details on shifting shopping habits in recent months.
Medline's comments came as Empire reported a quarterly profit of $178.5 million, up from $171.9 million a year earlier, as its sales also climbed higher.
The company said its fourth-quarter profit amounted to 68 cents per diluted share, up from 64 cents per diluted share a year before.
Sales in the 14-week period ending May 7 totalled $7.84 billion, up from $6.92 billion, helped by the additional week of operations, the acquisition of Longo's, higher fuel sales, increased food inflation, and the expansion of FreshCo in Western Canada and Farm Boy in Ontario.
Same-store sales excluding fuel fell 2.5 per cent compared to the COVID-elevated sales levels last year.
Empire is focused on supplier relationships and negotiations as well as its new rewards program to bring value to consumers, Medline said.
The company's new loyalty program Scene+ will help customers save money at the grocery store by earning and redeeming points for groceries, he said.
Statistics Canada said Wednesday its consumer price index rose 7.7 per cent in May compared with a year ago - its largest increase since January 1983 when it gained 8.2 per cent.
But the cost of food purchased at stores continued to outpace overall inflation, rising 9.7 per cent compared with a year ago as the cost of nearly everything in the grocery cart went higher.
This report by The Canadian Press was first published June 22, 2022.
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