As food manufacturers grapple with rising costs and supply chain issues, two of Burnaby's biggest grocers are signalling the potential for higher prices and the spotty availability of some products in the coming months.
Following reports of food shortages and hoarding at grocery stores, Canadian food retailer Save-On-Foods said in a statement that all shipments in and out of the Lower Mainland have been put on hold due to road conditions.
"We are exploring all avenues to get product to our stores as quickly as possible," it said.
This follows Fraser Valley dairy farmers being told to dump their milk as flood waters rise in the area. Other farmers have detailed the loss of tens of thousands of eggs.
Loblaw Companies Ltd. released its latest financial results on Wednesday, offering a glimpse at the inflationary pressures and labour challenges hitting the grocery industry.
The situation is expected to lead to higher food prices and brief shortages of some specialty products on store shelves, suggesting the pandemic could have a lasting impact on the food industry.
"There is meaningful commodity price pressures ... and then there's labour supply pressure," Galen G. Weston, Loblaw president and chairman, told analysts during a conference call. "Those two things are creating substantial challenges for our manufacturing base."
Loblaw operates multiple stores in Burnaby, including the Real Canadian Superstore, Shoppers Drug Mart and T&T.
Weston said manufacturers are consolidating production into the highest volume products and putting secondary sizes and flavours on allocation, managing limited supplies by limiting retailers to finite amounts of some products.
"What customers will be frustrated to see is something's in stock for a week, and then it's out of stock for four or five weeks," said Weston, adding that he expects to see the instability continue for a few more quarters.
Statistics Canada said Wednesday the annual pace of inflation in October rose to 4.7 per cent as the consumer price index posted its largest year-over-year gain since February 2003. The increase followed a 4.4 per cent year-over-year increase in September.
Higher prices could benefit discount grocery chains — such as Food Basics for Metro or No Frills for Loblaw.
But Weston said the "acceleration in inflation rates and the lack of predictability in what inflation is going to look like in the coming months and quarters" makes it difficult to predict any sustained trends.
- With additional reporting by the Canadian Press
