Tariff-driven hikes loom as Canada revises counter-measures and Loblaw depletes old inventory
Loblaw Cos. Ltd. warned that the number of grocery items affected by tariffs will rise sharply in the coming weeks as pre-tariff inventory is depleted.
Chief executive Per Bank said in a LinkedIn post that the retailer will increase its tally of tariff-marked products from just over 1,000 currently to more than 3,000 in the next week or two.
According to BNN Bloomberg, that number could exceed 6,000 within two months.
Bank said prices for some items will go up as a result.
While tariff-affected items will still make up a small portion of the 80,000 products stocked by the company, shoppers will notice changes in categories such as natural foods, pantry staples, and health and beauty products.
“While the tariff situation might be improving between the US and other countries, that’s not yet the case here in Canada. In fact, we’ll be facing a large wave of tariff-related increases in the weeks ahead,” Bank said.
According to Bank, it has been positive to see Prime Minister Carney and other leaders engaging in talks with US officials, noting hopes for “a rapid de-escalation of this situation.”
In mid-April, the federal government announced revisions to the $60bn in counter-tariffs it had unveiled in March.
These changes included a six-month suspension of tariffs on a broad range of US products used in Canadian manufacturing, processing, and packaging.
For example, milk imported for use in production would be exempt, but milk sold directly to consumers would not be.
Bank said he welcomed the shift in federal policy to limit counter-tariffs to finished food products from the US.
Tony Stillo of Oxford Economics noted that Canada has “essentially paused nearly all of its counter-tariffs.”
He said the changes would reduce price pressures and bring the effective tariff rate increase on the US to nearly zero.
Despite the adjustments, tariffs still apply to key grocery items such as orange juice, alcohol, uncooked pasta, and guinea fowl in a glass jar.
From the outset, Canada’s counter-tariffs had exempted US produce like lettuce due to market dependency.
Mike von Massow, a food economist and professor at the University of Guelph, said the government focused tariffs on products with Canadian-made alternatives, such as dairy, poultry, and grains.
“They put them on things that were highly substitutable,” he said.
He added that those willing to make small changes were less likely to feel the impact.
However, “if you are interested in a specifically aged cheddar from Wisconsin, then that’s going to go up in price.”
He also cited indirect pressures from US metal tariffs and general trade uncertainty. “The uncertainties with the US, it has the potential to increase prices even in the absence of tariffs.”
Jenna Jacobson, associate professor and Eaton Chair in Retailing at Toronto Metropolitan University, said Loblaw’s strategy to visibly mark tariff-affected products may help ease customer frustration by shifting blame to external policy factors.
“It’s diverting the negative blame from the retailer to these external policy or political issues,” she said.
While Jacobson said Loblaw stands out for being explicit about tariff impacts, she noted that other grocers have also been highlighting Canadian-made items.
She cautioned that despite Loblaw’s transparency, the fast-changing tariff environment presents risks.
“It’s basically an effort to simplify something that is very complex. That simplification has to be done accurately, otherwise, it serves to distort consumer perceptions.”
Empire Co. Ltd. said it has been actively working with suppliers to reduce impacts on customers and had begun diversifying its sourcing globally years ago.
Metro Inc. declined to comment.
