Loblaw expects number of tariff-affected products to rise as trade war drives up costs

Loblaw Companies said the number of tariff-hit products in its stores could peak at 7,500—higher than its previous estimate of 6,000—as the U.S.-Canada trade war drags on.

The food and pharmacy retailer has been helping shoppers identify products directly sourced from the U.S. with “T” symbols. 

In May, president and CEO Per Bank warned the number of “T” symbols on Loblaw’s shelves could reach 6,000 in the coming months. Now, he's expecting that number to rise.

“Based on our experience since then, that number will move closer to 7,500, as the full effect of tariff countermeasures are felt,” Bank shared to Linkedin Wednesday (July 16).

Bank said 30% of the inflationary cost increases the grocer is seeing are directly linked to tariffs in one way or another.

“Inside our business, the consequences of tariffs are being discussed in virtually every supplier meeting we have,” he said.

On average, he added the grocer has seen sales volume decline by roughly 15% to 20% on products marked with a “T”—with some declines nearing 50% where “strong alternatives” exist.

“Volumes on products prepared in Canada increase, demonstrating the strong desire by consumers to continue supporting Canadian products and brands.”

Loblaw recently added 70 local suppliers, bringing its total number of new Canadian vendors to 100 for the year. 

“For the most part, our recent cost negotiations with suppliers have been straightforward and transparent—increases are tabled; any accepted costs directly caused by the tariffs are accepted penny for penny; and tariff-related costs will be eliminated once this situation is resolved. There have been cases where we believe the cost increases are not justified or are meant to take advantage of tariffs over the long-term. In these cases, we strongly push back. We know this is what Canadian consumers expect us to do. 

“Like most of you, we want this situation to end fast, and with the least disruption to consumers and suppliers alike. I commend Prime Minister Mark Carney for the Canadian government’s efforts to resolve these U.S.-driven trade issues. In the meantime, I will reiterate we will continue to focus on value, make it easier for our customers to shop Canadian brands and products, and to advocate on their behalf.”

Bank's post comes as U.S. President Donald Trump threatens to impose 35% tariffs on Canadian imports on Aug. 1. 

Loblaw is scheduled to release its second quarter earnings on July 24.