Loblaw still adding Canadian products but CEO says ‘Buy Canadian’ trend may not last

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Loblaw Cos. Ltd. says it’s still working to stock its grocery store shelves with more Canadian products as shoppers look for local alternatives during the Canada-U.S. trade war, but the company’s chief executive admits the shift may not last.

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“We recognize that Canadians care deeply about the region of the product they purchase and we continue to actually seek out Canadian growers and manufacturers for the products we sell,” Loblaw president and CEO Per Bank told analysts on a conference call Wednesday, as the company reported its first-quarter profit rose compared with a year ago.

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While Bank said it’s difficult to gauge consumer preferences in-store, data from Loblaw’s online grocery service shows a clear pivot by shoppers toward the “Buy Canadian” movement that has gained momentum since U.S. tariffs went into effect.

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He said less than four per cent of PC and No Name brand products come from the U.S.

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“Just before this meeting, I was down in the test kitchen and I was observing that they are testing a lot of new products,” Bank said.

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“They have been really, really busy to help mitigate the tariff situation so we can buy less from the U.S.”

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With tariffs adding to pressure on the cost of some food items and other essentials, Bank said the grocery retailer is “working diligently to keep prices as low as possible.”

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Earlier this year, Loblaw began highlighting domestic products in its stores while also marking products that have seen price hikes due to tariffs. It also added a “swap and shop” feature to its loyalty app to help shoppers find Canadian products more easily.

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Asked if he anticipates the “Buy Canadian” trend will persist, Bank said he was hopeful, but predicted that “maybe a third of it will stick” long term. He said price and quality are still the most important factors customers consider when choosing which products to buy.

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“If price and quality is best (for) a Canadian product, then they choose those, but if it’s a foreign product, they will choose that,” said Bank.

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“Right now, they prefer Canadian products. I would say if the price is almost the same, like up to five per cent different, then customers buy Canadian, so I hope it sticks.”

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The parent company of Loblaws and Shoppers Drug Mart said it also continued seeing strong customer response to loyalty offers and promotions during the quarter.

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Its net earnings available to common shareholders amounted to $503 million or $1.66 per diluted share for the quarter ended March 22. The result was up from a profit of $459 million or $1.47 per diluted share in the first quarter of 2024.