Loblaw sees value of supplier cost increase requests jump 120%

Loblaw Companies says the dollar value of proposed supplier cost increases jumped 120 percent in its latest quarter compared to a year ago. The food and pharmacy retailer said it is challenging hundreds of millions of dollars in what it calls unjustified increases. The number of supplier requests actually declined by 35 percent, but the value of those requests rose sharply. Loblaw said it is actively managing submissions covering 2,000 items, representing $32 million in proposed annualized cost increases.

The products in question cover both food and non-food items, including haircare products, baking mixes, doughs and cheese. In its latest Food Inflation Report, Loblaw attributed the supplier cost increases to rising commodity pressures. Eight of the 10 commodities it tracks increased in price in September. The company also cited rising diesel and freight costs, along with new tariffs, as adding further uncertainty.

Canada’s latest retaliatory tariffs could affect 2,500 products in its stores, Loblaw said, though that is fewer than the 5,000 potentially affected next year. The current tariff rates can reach 50 percent, compared to 25 percent in 2025. Loblaw reinstated a “T” symbol on shelf tags in August to denote a tariff impact on price. At the moment, only a few dozen items in its stores carry the symbol.

Grocery prices increased 1.7 percent year over year in September, according to Statistics Canada. That is the smallest yearly increase since May 2024. The slowdown was driven by price declines for fresh vegetables, which fell 2.9 percent, and sugar and confectionery, down 2.7 percent. Prices for other food preparations and fresh or frozen beef rose at a slower pace. Overall, grocery prices have increased 33 percent since September 2020.

With files from Canadian Grocer