By Allison Collins, CNN • Updated 17th April 2017
When a major retailer blames “external challenges” for a drop in sales, it usually causes us to check to see if the price for fish on our bar code is the same as at the supermarket.
That’s apparently not the case with Loblaw Companies Limited, which has blamed escalating prices for meat, produce and other items on factors that it says are beyond its control.
The Ontario-based grocer announced late Tuesday that it’s blamed its sales drop on “lower sales and higher costs” at an investor conference.
“Inflationary pressures on categories such as meat, meat products, eggs, seafood, dairy, produce and bakery products” are impacting sales, the company said in a release, “following a period of relatively stable pricing and deflation.”
A few minutes into the company’s conference call, analyst Greg Salter from Werklund Financial Network said that some of the issues are related to supply chain management, while others can be traced to promotional strategy.
“I have to believe a large percentage of it is related to the retail trade,” he said.
CEO Galen Weston responded: “It’s tough to point fingers and assign blame. We’re working on things, and we’ve identified a list of those things.”
“Inflationary pressures on commodity categories that Loblaw Foods is a supplier of are challenging,” Loblaw Companies said in a statement, but offered few more details.
The companies, which operate in Canada through stores called Shoppers Drug Mart, are the largest grocers in the country.
Stacey Bailey, executive vice president of Loblaw Companies, promised better partnerships with suppliers to ensure good quality.
Loblaw said last week that it’s looking to sell off some of its assets in Canada as the company mulls a sale, a move that may be prompted by the recent change in chief executive.