Consumers are looking for savings in the frozen vegetable aisle at Loblaw banners as prices of fresh produce have spiked in recent months. “It’s more than (five percentage points) growth in the frozen veg in our hard discount banner,” Loblaw Cos. Ltd. chief executive Per Bank told analysts on a second-quarter earnings call on Thursday. Hard discount largely refers to the company’s No Frills and Maxi chains. “Those customers who shop there, they are trying to mitigate their inflation.” Affordability continues to drive buying decisions as consumers contend with high gasoline and food prices. Statistics Canada reported that prices for fresh vegetables rose more than nine per cent in June year-over-year. Food inflation has outpaced overall inflation for 17 months in a row. Tomato prices specifically soared more than 30 per cent last month, after surging more than 45 per cent in May, which StatCan attributed to poor weather conditions and less planted acreage in Mexico after the U.S levied tariffs. Tomatoes were a hot commodity, Bank said. “Trust me, we are selling tons of tomatoes in hard discount,” he said. The grocer reported its second-quarter profit and revenue rose compared with a year ago, as its aggressive expansion in discount has been paying off. Loblaw said it had a profit attributable to common shareholders of $751 million or 64 cents per diluted share for the 12-week period ended June 20, up from $714 million or 59 cents per diluted share a year earlier. Revenue, including both its retail operations and the PC Financial business which has since been sold to EQB Inc., totalled $15.27 billion, up from $14.67 billion in the second quarter of 2025. Food retail same-store sales rose 1.6 per cent. RBC analyst Irene Nattel said in a note that Loblaw delivered another solid quarter. She said food same-store sales and food revenue were in line with expectations, reflecting ongoing discount-seeking consumer behaviour. But a prolonged war in Iran could continue to keep food prices high, dampening consumer sentiment. A peace deal between the U.S. and Iran in June had helped lead to softer inflation. But a flare-up in the conflict more recently has led to renewed concerns inflation will jump again. “(Gas) prices went up and then they started to go down again and now they’re going back up,” said chief financial officer Richard Dufresne. “It’s very hard to predict.” So far, he said inflation has remained stable but “if this lasts longer than expected, you’re going to see an impact.” Bank said persistent fighting in the Middle East could also lead more suppliers to ask for cost increases, which he said the grocer is prepared to push back on. Meanwhile, drug retail same-store sales gained 4.6 per cent in its latest quarter as pharmacy and health-care services same-store sales jumped 7.5 per cent and front store same-store sales rose 1.3 per cent. Per said higher sales of the generic version of weight-loss drug Ozempic helped drive up retail drug sales. While it’s still early, Loblaw is expecting sales of weight-loss drugs to grow exponentially next year. On an adjusted basis, Loblaw says it earned 66 cents per diluted share in its latest quarter, up from an adjusted profit of 59 cents per diluted share in the second quarter of 2025. This report by The Canadian Press was first published July 30, 2026.
