Three major Canadian grocery stores say soaring food prices are shaping shopping habits. LoblawCompanies Ltd. provides insights on how people are saving money on grocery bills amid rising inflation.
Rob Lowe reported Wednesday’s first-quarter results that consumers are shopping for groceries more often, buying less with each visit, pandemic restrictions relaxed, and grocery As costs rise, we are shifting to value-oriented stores.
Grocery and drugstore retailers said discounts, including No Frills and Maxi, recorded strong growth in the quarter while demand for their products surged.
According to Rob Lowe Chairman and President Galen G. Weston, Rob Lowe’s unnamed private label brand, with its unique yellow and black packaging, has reached record sales.
“This shows that Canadian consumers are steadily increasing their interest in value,” he said in a conference call.
His comments came after Metro Inc. highlighted similar changes in shopping patterns last month.
“Inflation is accelerating and it’s affecting consumers,” Metro’s president and chief executive officer Eric La Fleche said in April. “There is a quest for value and a shift to discounts.”
Empire Co. Ltd., the parent company of grocery chains Sobeys, Safeway and FreshCo, said in March that customers were buying more retailers’ own brands and choosing larger formats with higher value. rice field.
Statistics Canada said last month that Canada’s food inflation rate reached 8.7% in March.
According to Weston, Rob Lowe tackled its own internal cost pressures in the quarter ending March 26, raising prices for fuel, transportation, raw materials and packaging.
Richard Dufresne, Chief Financial Officer of Loblaw, said these costs were “small compared to the increased costs of resale products.”
According to Weston, retailers now have a “central procurement team” to integrate purchases with vendor negotiations.
The team said, “We will assess the impact of cost inflation on the cost of commodities and allow us to negotiate with the vendor base,” and the company is careful to accept only “actual legitimate cost increases.” I added.
Loblaw was caught up in a hot price dispute with Frito-Lay Canada this quarter, with manufacturers of brands such as Cheetos, Doritos, Lays and Ruffles pulling products from the Loblaw store. The two companies said last month that they had mutually resolved the issue.
Meanwhile, Rob Lowe’s pharmaceutical business stood out in the quarter, driving significant growth in sales and gross profit, the company said.
Rob Lowe’s drugstores, including Shoppers Drug Mart and Pharmaprix, had strong front store and prescription sales.
“Once consumer behavior normalized, customers returned to the shoppers beauty counter and produced excellent results in high-margin categories such as cosmetics,” Weston said.
“Coughs and colds have increased significantly, prescriptions have increased, and pharmacy services have continued to expand over the years.”
Same-store sales at the company’s pharmacies increased 5.2%, prescription sales increased 6.8%, and front-store sales increased 3.6%.
Same-store sales at food retail increased 2.1%, benefiting from higher than normal home dining levels.
Revenues for the quarter increased from $ 11.87 billion in the year-ago quarter to a total of $ 12.26 billion.
Loblaw reports that profits available to common shareholders totaled $ 437 million in 12 weeks (diluted) compared to $ 313 million in the year-ago quarter (90 cents per diluted share). It was $ 1.30 per share).
The company said it would pay a quarterly dividend of 36.5 to 40.5 cents per share.
On an adjusted basis, Rob Lowe said it generated $ 1.36 per diluted share from an adjusted profit of $ 1.13 per diluted share a year ago.
In a client note, Irene Nattel, an analyst at RBC Dominion Securities Inc., said Loblaw highlighted the company’s “favorable momentum change” and posted another quarter of more powerful results than expected.