News Briefs

OTTAWA - Food inflation remains stubbornly high in Canada as grocery prices climbed at the fastest pace in more than four decades last month.

While overall inflation moderated in August, the cost of food purchased from stores was up a staggering 10.8% compared with a year ago.

That's the fastest clip recorded by Statistics Canada since 1981.

Dalhousie University food professor Sylvain Charlebois says the protracted nature of food inflation is prompting Canadians to change shopping habits to save money.

He says new research shows many people are shifting where and how they buy food, shopping more at discount stores, buying cheaper store brands, using loyalty programs and scouring weekly flyers for deals.

However, experts say food inflation is expected to ease in the coming months as input costs decrease.

"With transportation costs and agricultural commodity prices now off their peaks, the trend in food price inflation should start to soften towards the end of this year and into 2023,'' Andrew Grantham, senior economist at CIBC Capital Markets, said in a client note Tuesday.

OTTAWA - Statistics Canada says retail sales increased 1.1% to $63.1 billion in June, boosted by higher sales at gasoline stations and motor vehicle and parts dealers.

Higher prices helped lift sales at gasoline stations 3.9% for the month even as sales at gasoline stations in volume terms fell 1.3%.

Meanwhile, sales at motor vehicle and parts dealers gained 1.8% in June, boosted by a 2.9% gain at new car dealers.

Core retail sales - which exclude gasoline stations and motor vehicle and parts dealers - rose 0.2%.

In volume terms, retail sales gained 0.2% in June.

Statistics Canada says its preliminary estimate for July suggests retail sales for that month fell 2.0%, but cautioned the figure would be revised.

-The Canadian Press

Canadian Tire Corp. Ltd. reported lower second-quarter profit compared to a year ago.

The retailer reported its net income attributable to shareholders totalled $145.2 million or $2.43 per diluted share for the quarter, down from $223.6 million or $3.64 per diluted share a year earlier.

Canadian Tire says retail sales rose 9.9% and comparable sales, excluding petroleum, gained 5.0%. Retail sales at its SportChek banner grew 0.6% as comparable sales gained 4.1%, and retail sales at its Mark's banner rose 21.1%t as comparable sales rose 20.9%.

On a normalized basis, Canadian Tire says it earned $3.11 per diluted share, down from a normalized profit of $3.72 per diluted share a year earlier.

The company says while the performance of the retail segment of the business remains significantly above pre-pandemic levels on a normalized basis, higher expenses including foreign exchange resulted in earnings coming in lower in the second quarter compared to the prior year.

Canadian Tire also says its financial services revenue grew 15.0%, driven by growth in receivables and growth in credit card sales, due to increased customer activity and new account acquisitions.

-The Canadian Press

Workers at Metro Inc. are putting in overtime to keep stores open as the company grapples with an ongoing labour crunch, the Montreal-based grocery and drugstore retailer said Wednesday.

"There's a lot of open positions out there and there's not enough workers to fill them,'' Metro president and CEO Eric La Fleche said during a call to discuss the company's third-quarter results.

Canada's labour market remains exceptionally tight, with more than one million job vacancies across the country amid historic low unemployment rates, according to Statistics Canada.

"Labour shortages are causing pressures ... because that increases overtime to supply our stores,'' La Fleche said. "We have higher overtime percentages than we're used to.''

He added that Metro currently has "more open positions'' than usual but declined to provide an exact number of vacancies across the company's warehouses and stores, which include conventional supermarkets like Metro and Metro Plus, discount grocery chains Super C in Quebec and Food Basics in Ontario as well as drugstores Jean Coutu and Brunet.

La Fleche's comments came as the retailer reported a third-quarter profit of $275 million, up from $252.4 million a year earlier, as sales gained 2.5%.

The profit amounted to $1.14 per diluted share for the period ended July 2, up from $1.03 cents per diluted share a year earlier.

Sales totalled $5.87 billion, up from $5.72 billion, as food same-store sales gained 1.1% and pharmacy same-store sales rose 7.2%.

On an adjusted basis, Metro said it earned $1.18 cents per diluted share for the quarter, up from $1.06 per diluted share a year earlier.

The grocer warned that ongoing inflationary pressures and labour shortages could begin to weigh on margins.

"If this high inflationary, high price environment continues it will continue to put pressure on margin,'' Metro chief financial officer Francois Thibault said.

For now, strong margins in the company's pharmacy division made up for a decline in food gross margin, he said.

"We had very strong front-store sales in our pharmacy business at Jean Coutu and Brunet in the quarter,'' La Fleche said. "Over-the-counter cough and cold products are flying.''

Canada's jobless rate stayed at 4.9% in July, the lowest since comparable record-keeping began in 1976, Statistics Canada reported last Friday in its latest labour force survey.

Meanwhile, inflation continued to shape consumer habits during the company's third quarter.

Shoppers increasingly opted for discount grocery stores, switched to cheaper house brands and sought out cheaper protein choices.

"We saw the shift from conventional to discount (stores) accelerate when compared to the previous quarter,'' La Fleche said.

"We also saw a shift to private labels (and) trading down on proteins ... there's a shift for sure to value.''

The price of food purchased at stores increased 9.4% in June, Statistics Canada said last month.

Metro also said it expects same-store food sales to grow at a higher rate than in recent quarters and for growth in prescriptions on the pharmacy side of the business to moderate.

-The Canadian Press

MONTREAL - Dairy giant Saputo Inc. says it had net earnings of $139 million for the quarter ended June 30, up from $53 million for the same quarter last year.

Chief executive Lino Saputo says the company has navigated inflationary pressures by raising prices, booting productivity and undertaking cost containment initiatives.

Saputo says in a statement that the company could see improved margins as input costs stabilize and efficiencies and ``price realization'' continue.

Revenue for the company's first quarter of fiscal 2023 amounted to $4.3 billion, up from $3.5 billion in the same quarter last year.

Adjusted net income came in at $161 million, or 39 cents per share, up from $122 million, or 30 cents per share.

The company says it expects continued inflation pressures ahead on both product inputs and on logistic costs but that it will minimize the effects by raising prices as necessary.

-The Canadian Press

MISSISSAUGA, Ont. - Maple Leaf Foods Inc. saw its share price drop as much as 18% on the Toronto Stock Exchange after it said challenges in labour markets, supply chains and inflation pushed it to a net loss for the second quarter.

The company said it had a net loss of $54.6 million, or 44 cents per share for the quarter ending June 30, compared with earnings of $8.8 million or seven cents per share for the same quarter last year.

Analysts had been expecting earnings of 12 cents a share, according to financial data firm Refinitiv.

The company says the margin of its meat protein group fell short of guidance because of the wider economic challenges, while it took a $18.6 million restructuring charge on its plant protein group as it looks to "rightsize'' the business.

Total company sales were up 3.1% to $1.2 billion, while sales in the plant protein group were down 15.2% to $40.8 million.

Maple Leaf's shares closed down $4.63, or 17.2%, to $22.33 on the Toronto Stock Exchange after trading as low as $22.02 earlier in the day.

-The Canadian Press