Loblaw expects higher minimum wage rules will increase its labour costs by $190M
TORONTO — Canada’s largest grocery and drug store operator warned Wednesday that minimum wage increases in Ontario and Alberta threaten to harm its bottom line and it will have to find ways to cut costs.
Loblaw Companies Ltd. (TSX:L), which owns Shoppers Drug Mart and grocery chains including Loblaws and No Frills, estimates the wage hikes will mean its labour costs will grow by about $190 million next year.
“We are flagging a significant set of financial headwinds and the organization is mobilizing all of its resources to see whether or not it can close that gap,” Loblaw chairman and CEO Galen G. Weston told analysts during a quarterly earnings conference call.
“At this point, we don’t know the answer.”