No name, no price hikes

Inflation numbers are dropping on Wednesday, shoppers and politicians are getting pretty pissed about food prices, and Loblaw is starting to play defence. 

Driving the news: Canada’s biggest grocer announced it will freeze prices on all of its No Name products (over 1,500 items) until January 2023, per The Globe and Mail. 

Why it matters: Chances are that a high sticker price has made your jaw drop in recent months. The freeze will offer some temporary relief for strapped shoppers, especially ahead of the holiday season. 

  • Another view, shared with The Globe and Mail by Dalhousie University professor Sylvain Charlebois is that other big grocers will face hard questions about food prices around this week’s inflation report, but “Loblaws will [now] have an answer.”

Catch-up: Grocery prices were up 10.8% as of August compared with last year–the fastest increase since 1981–leading shoppers to turn to lower-priced brands. 

  • Year over year, prices are up for condiments (17.2%), bakery goods (15.4%), coffee and tea (13.5%), fresh fruit (13.2%), seafood (8.7%), meats (6.5%), and more.

Zoom out: Major grocers, including Loblaws, reported record profits this year, leading to accusations of price-gouging and a subsequent investigation into their behaviour. 

  • As pressure mounts on politicians to take a closer look at pricing across the grocery sector, the move to freeze prices could also be part of an effort to ward off scrutiny.

Loblaw maintains the increased costs are out of their control and blamed the price jumps on increased suppliers’ costs. At the same time, some independent analysts also argue the profits of major grocers have been driven simply by people buying more, and more expensive stuff.