Empire says sales of U.S. products 'rapidly' dropping
The Stellarton, N.S.-based company typically sourced 12% of products from the U.S. by dollar value, but that number is falling
Canada’s second-biggest supermarket company said a boycott of U.S. goods is quickly taking hold in reaction to United States President Donald Trump’s tariffs and his threats of “economic force” to make the country the 51st U.S. state.
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“American products we are selling as a percentage of our total sales are rapidly dropping,” said Michael Medline, chief executive officer of Empire Co. Ltd., which owns large chains including Sobeys and Safeway in Canada. “We have heard loud and clear from our customers that they want Canadian products.”
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The Stellarton, N.S.-based company typically sourced 12 per cent of products from the U.S. by dollar value, Medline said on the company’s fiscal third quarter earnings call Thursday — but that number is falling “and will continue to, as we shift our supply” away from U.S. to Canadian products.
That will help offset the cost of retaliatory tariffs Canada has placed on U.S. products and any weakness in the Canadian dollar, Medline said. Growth in sales of Canadian products has outpaced overall revenue, he said.
Empire had $31 billion of revenue in the 12 month-period ended Feb. 1.
Suppliers are shifting their operations to adapt to tariffs, he added — citing Swiss chocolatier Chocoladefabriken Lindt & Sprungli AG, which will now supply the Canadian market entirely from Europe, instead of 50 per cent from the U.S. as it did previously.
Sobeys had 21 per cent of the Canadian grocery market, behind only Loblaw Cos. Ltd., according to a 2022 report from the Retail Council of Canada. Empire shares were down 2.6 per cent to $43.30 at 12:43 p.m. in Toronto.
Government officials including outgoing Prime Minister Justin Trudeau have encouraged buying Canadian goods over American ones, and the country’s competition watchdog recently issued information to help people do so.
The Trump administration imposed 25 per cent tariffs on a wide variety of Canadian products last week — though it delayed the levy for goods trading under the rules of the countries’ free trade deal. Then it added 25 per cent tariffs on steel and aluminum on Wednesday.
Canada has responded with counter-tariffs against $60 billion of U.S.-produced items, including an array of fresh and processed food.
“I don’t think people are interested to pay more, or to pay 25 per cent for U.S. product right now,” Empire chief operating officer Pierre St-Laurent said on the call.
Bloomberg.com
