In a move that may benefit its competitors, Walmart Canada is raising its grocery prices in some markets, according to a new report by BMO Capital Markets. Analysts say they have witnessed trends that suggest, “Walmart Supercentre is finally passing through higher wholesale grocery costs in the form of retail grocery inflation.”
“Based on our surveys, [Walmart] had not been passing through the cost of wholesale grocery inflation to its customers until the last few months, while other grocers had started to slowly do so since the beginning of 2014,” said the report.
Statistics Canada noted a 1.2 per cent increase on food retail prices in 2013, led by fish, which experienced a 4.1 per cent price increase, and vegetables, which increased by 5.2 per cent.
“Retail inflation at Walmart Supercentre is clearly a positive development for other grocers as overall industry retail grocery inflation would not be sustainable if Walmart Supercentre were to hold its prices flat,” BMO Analyst Peter Sklar told the Financial Post.
According to BMO Capital Markets, while large grocers inflated their prices during the second quarter, food volume dropped. The 2014 Food Price Index Report by the University of Guelph predicted retail food prices would grow from 0.3 to 2.6 per cent this year.
