Give Canadian grocery giant Loblaw (TSE:L) credit, as it has been doing quite a bit to insulate Canadians from the impact of tariffs at the grocery counter. But that impact is about to hit harder in the next few weeks, and Loblaw is warning that its stockpiles are waning. That did little help for Loblaw stock, but hurt it little too, as shares dipped fractionally in Wednesday morning’s trading.
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Basically, much of what Loblaw has been selling of late is pre-tariff, stocked up before the tariffs took hold, and thus could be sold at closer to their original prices. But those stockpiles are running thin now, and Loblaw will have little choice but to hike prices accordingly as they restock from goods with tariffs in place.
Per Bank, Loblaw’s CEO, noted that, right now, Loblaw has about 1,000 products on its shelves that carry tariff. But over the next two weeks, that number is likely to triple, hitting over 3,000 products. Before the next two months is out, that number will potentially double once more, reaching 6,000 total. Given that Loblaw stocks a total of 80,000 items or so, there will still be plenty of non-tariff items to choose from. But with several categories—pantry staples and health and beauty products—likely hit, Loblaw decided to warn its customers regardless.
The Print Receipt is Still Valuable
While Loblaw has made quite a bit of pushing digital advancement, particularly in its loyalty program, it is still getting a lot of value from an unexpected source: the paper receipt. Loblaw is putting this seeming-anachronism to work in some unexpected ways, and reaping rewards therein.
Rohit Dua, Loblaw’s vice president of loyalty portfolio management, noted that, apparently, Loblaw regards the paper receipt as a “mini billboard” that serves as a means to “communicate with your customers.” So Loblaw includes things like points tracking numbers for the loyalty program, which helps users know what rewards they have coming, and encourages further shopping.
Is Loblaw a Good Stock to Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on TSE:L stock based on six Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 38.3% rally in its share price over the past year, the average TSE:L price target of C$236.87 per share implies 11.31% upside potential.
