Loblaw Companies Ltd., Canada’s largest grocery operator, said Wednesday that minimum wage increases in Ontario and Alberta will hurt its bottom line and that they will have to look at ways to cut costs.
“We plan to intensify our focus on cost reductions in this highly competitive market given incremental external pressures on our industry,” Galen Weston, chairman and chief executive officer, Loblaw Companies Ltd., said in a statement when reporting on the company’s quarter financial results.
The company predicts that minimum wage hikes will increase their labour expenses by $190 million in 2018.
The Ontario government plans to boost minimum wage from $11.40/hour to 14/hour as of January 1, 2018 and then again to $15/hour as of January 1, 2019. In 2015, the Alberta government announced that it would raise minimum wage from $10.20/hour to $15/hour by next year.
Loblaws has more competition than the pressures of minimum wage increases. Canada’s food retail industry is changing. Last month, Amazon acquired Whole Foods for $17.14-billion. You can read our columnist Peter Chapman’s assessment on that acquisition by clicking here.