Grocers duke it out for consumer love as high cost of food hits bottom line _ edmonton journal

Even as grocery giants across Canada battle for market share, with the muscled likes of Loblaws well in the lead, the charismatic British food icon is doing his best to cuddle with consumers. High profit companies In a new, broad-based ad campaign, Oliver makes a convincing argument that grocery costs are cheaper in the western Canadian outlets of Safeway and Sobeys, currently boasting a new pricing regime.

Featuring weekly “produce picks,” the new campaign promises lowered prices on many fruits and vegetables compared to the regular in-store everyday prices.


Items to sell with high profit margins These include such popular staples as apples — selling for roughly 50 cents a pound less in a recent price check.

Keri Scobie, Sobeys communications manager in Western Canada, says the campaign is not in reaction to the widely touted produce crisis, which saw items such as the previously unglamorous cauliflower selling for upwards of $7 a head in January.

“(The campaign) is not reactionary,” Scobie insists. Low risk high profit business ideas “Research shows what’s important to customers, and that’s quality products, and fresh products and meat.”

Coincidentally, or not, full-page ads touting grocery specials for Save-On-Foods, complete with coupons, have appeared in newspapers hard on the heels of the Sobeys campaign. Low cost business ideas with high profit At the same time, Loblaw (whose brand includes Real Canadian Superstore in Western Canada) is making noise about its latest offering — a click-and-collect service which lets Edmonton consumers buy groceries online and then pick up the goods at a half-dozen area Superstores for a fee of between $3 and $5.

These moves, say retail experts, are set against a backdrop of high food prices in Canada that sees consumers carefully selecting where to spend their protein and produce dollars.

In 2015, according to a new survey by Canadian Grocer, total traditional grocery store sales in Canada rose to $91 billion, up from $89 billion a year earlier. Low investment high profit business in chennai That sounds like a lot of sales, but experts note that profit margins of a mere 1.5 to two per cent mean competitors must work every trick in the book to lure consumers through those automatic doors, empty cart in tow. Small business high profit Inflation boosts annual grocery bill by $345

In December, Statistics Canada reported that food prices increased at double the overall inflation rate. High profit small business ideas Canadians paid 3.7 per cent more for food in December than they did a year earlier, with a kilogram of stewing beef up more than a dollar a kilogram.

Fresh vegetables were among the stressors, rising in price more than 13 per cent, year over year. High profit products to sell on ebay The declining Canadian dollar and weather conditions, including drought followed by floods in California, are responsible, in part, for the upward pressure.

But according to grocery retail expert George Condon, a consulting editor for Canadian Grocer with more than 35 years of experience in the field, prices have been rising behind the scenes for several years, with food manufacturers charging more to the retailers.

“Manufacturers of grocery products have had increases over the last five years and they have been trying to pass the prices along, but the retailers have been resisting and that’s broken through in the last few months,” says Condon.

More price hikes are expected in 2016, for products from meat to produce. High profit business The Food Institute of the University of Guelph says the average Canadian household will spend $8,631 on groceries and restaurant meals this year, up by $345, because of inflation.

The institute’s latest forecast pegs food inflation at between two and four per cent in 2016 — compared with 4.1 per cent in 2015. Low price high profit shares Those higher food costs put grocery retailers in a difficult position, especially in Alberta where the economy has been hard hit by the low price of oil, says Sylvain Charlebois of the University of Guelph’s Food Institute.

“The economy is shifting so rapidly, grocers are quickly adjusting to Alberta’s macro-economic reality,” says Charlebois. High profit margin products in india “Sales numbers are softening and so they are very careful in terms of setting the right price points for many, many products, especially for products that have seen volatile prices historically, such as produce.

There is a limit to what people will pay, say, for cauliflower (the price of which has dropped substantially in the last month as grocers try to unload the knobby plant).

The problem for grocers is that produce spoils, and must be moved out quickly. Low investment high profit business ideas Retailers may be willing to take a bath — or a loss leader as it’s known in the trade — to sell a perishable product. High profit business in india 2012 They hope low produce prices will bring people into the store, where they will spend more money on canned and packaged goods, which can sit for awhile with no harm done.

In particular, grocers hope consumers under financial duress will look toward private label goods, such as the Compliments line at Sobeys (which purchased Safeway in 2013) because profits are tucked inside no-name packages of pasta and cans of peas.

Indeed, private label goods — virtually invented by pitchman and former CEO Dave Nichols back in the 1980s — have anchored Loblaw for decades. What is a high profit margin Sales of President’s Choice, GREEN and now, Blue Menu items have helped secure Loblaw’s position as the top grocer in Canada.

According to Canadian Grocer’s 2016 Annual Directory of Chains and Groups in Canada, Loblaw and its banners hold just over 28 per cent of the total grocery market, with Sobeys and its numerous brands in the number two spot at just under 22 per cent. Highest profit margin products on ebay Tiny Overwaitea (which owns Save-On-Foods) occupies less than three per cent of market share. Low capital high profit business Extra pinch to be local and organic

If you think high prices for everything from berries to beef is hurting the retail giants, imagine what they are doing to the little guy. Low risk high profit business Danny Turner, co-owner of Edmonton’s The Organic Box grocery delivery service, says he’s feeling the pinch.

His cost for organic broccoli and cauliflower are up 18 per cent, says Turner, and the price of lettuce from the supplier has rocketed 38 per cent over last year.

Danny Turner, owner of Edmonton’s The Organic Box, says his company is feeling the pinch but is choosing to eat some of the higher costs, so to speak, to maintain his business. Business ideas with low investment and high profit “It’s better to have cash flowing, to be busy, even if you have to sell at a compressed margin.” Ed Kaiser

“Salads are more expensive now because of the dollar and the weather, and because we are at the very end (of the road), we pay more freight, too,” he acknowledges. High profit business opportunities “It’s a perfect storm of circumstances.”

Turner doesn’t pass on 100 per cent of the food cost increases to consumers, because customers don’t like that. Business with high profit Last year, he opened outlets of The Organic Box in Fort McMurray, Grand Prairie, Hinton and Peace River, where customers pay the same price as those in Edmonton, even though the further freight drives up Turner’s costs.

“In times like this, we adopt the philosophy of cheap and busy,” he says. Today high profit shares “It’s better to have cash flowing, to be busy, even if you have to sell at a compressed margin. Best business ideas with low investment with high profit If I want to sell my potatoes, I’m going to have to take a hit on oranges to get them in the door.”

And while Turner does a roaring trade in local food, with 50 per cent local in the winter and 80 per cent in the summer, that doesn’t necessarily mean he can offer local stuff for cheaper. Low budget high profit business The short length of our growing season and economies of scale enjoyed by southern growers mean American produce is still cheaper, even though it has to travel a great distance.

Plus, Turner has to get the best price possible for the local products he sells, because his farmers need to make money, too. High profit products to sell If Turner wants them back next year, he’d better get them a price that will yield profits.

Prices in the organic sector are high anyway, due to a lack of supply. Low investment high profit business in bangalore Turner hopes a recent move by the federal government’s Western Economic Development Department to support organic producers will ease the situation over time.

The University of Guelph’s Charlebois says there’s actually quite a bit the federal government could do to increase food price stability in Canada. Low investment and high profit business He suggests a national food strategy is in order.

“We are still a nation of producers, with little in the way of secondary industry to turn those raw products into finished goods, such as pasta, and reduce our dependency on high-priced imported products.

“We’ve always taken the easy route in Canada, exporting raw material like beef and pork and wheat. High profit margin industries But with value added, we can feed ourselves and the rest of the world, too.”

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