Higher grocery prices coming, Canadian company warns

Customers of Metro Inc. should prepare themselves for higher prices as the Canadian grocery giant says it is facing pressure from suppliers to accept higher prices in light of the ongoing tariff dispute with the United States, its CEO said Wednesday.

“We’re starting to get demands from some suppliers who are, whose products will be, affected by the new tariffs,” Eric La Fleche said during a conference call with analysts Wednesday after the company released its third-quarter earnings report.

The Canadian government implemented tariffs on Canada Day on a number of American-made goods, including yogurt, orange juice and maple syrup, in retaliation for U.S.-government imposed tariffs on Canadian steel and aluminum products, which are also putting pressure on some Canadian food manufacturers.

The company is currently reviewing suppliers demands and negotiating prices, La Fleche said.

“If it’s legitimate and if it’s industrywide, sometimes we won’t have a choice and we will have to accept,” he said, adding the company has already agreed to some minor cost increases.

Metro will continue to ensure its retail prices are competitive, he said, but expects the company, as well as the market as a whole, will have to accept some cost increases.

Ontario’s new minimum wage, which rose to $14 at the start of the year, is adding extra pressure on prices.

“We expect that the cumulative effect of all these cost pressures should start to be reflected at retail,” La Fleche said. “We’re just starting to see some minor price increases — nothing major.”

Empire Co. Ltd., which operates subsidiary Sobeys Inc., predicted a similar outlook in late June, when the company reported its latest quarterly earnings.