Walmart Canada raising prices

BMO report suggests other grocery retailers could follow Walmart Canada's lead
10/10/2014

Walmart Canada has raised their grocery prices in recent months, according to a new BMO report.

Peter Sklar, a BMO analyst, says he’s seen consistent data supporting the fact that Walmart Canada “is finally passing through higher wholesale grocery costs in the form of retail grocery inflation.”

The observation was made after BMO analysts assessed a grocery basket of 70 items from May to August. While the sample size was small, Sklar believes the results are indicative of overall trends.

“If Walmart Supercentre continues to steadily pass through, this could potentially lead to a sustainable healthy level of retail price inflation amongst all grocers,” says Sklar.

Unfortunately, while Walmart Canada seems to be setting the tone in terms of grocery prices, Sklar says other grocers appear to have “slowed and eased off” from higher levels experienced earlier this year.

Loblaw, Metro and Sobeys saw food price inflation in the second quarter, the BMO report says, but the food volume declined at all three chains.

Sklar’s observations come at the heels of a pricing study from research firm Kantar Retail, which found Target Canada’s prices were 3.9% lower than Walmart Canada.

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