The owner of Canada’s largest grocery chain said he’s concerned surging energy prices are threatening to reignite food inflation.

Galen Weston, the controlling shareholder and chairman of retailer Loblaw Cos., said disruptions to global oil supplies due to war in the Middle East are raising costs for food producers’ inputs, from diesel to fertilizer, which could be reflected on store shelves.

“We’re worried about it,” he said at an event in Toronto. “Not worried that it’s going to go back to 11% like it was in 2021, but worried that all these forces out there are going to continue to put pressure on that value chain.”

Grocery prices have jumped by 33% in six years in Canada, according to recent data from the country’s statistics agency.

The Bank of Canada raised interest rates for the first time since 2023 this week to combat inflation already creeping into the economy from higher fuel prices. Pressure on food would add one more pain point for consumers.

Owing most of his $22.8 billion net worth to his Canadian grocery stores, that’s a problem for Weston too. In his speech, Weston recalled that he was labeled “the most hated person in Canada” when food inflation ran out of control during the Covid-19 supply shock, and he was called before a parliamentary committee to answer for it.

He was grilled by politicians and lampooned on comedy shows. A Reddit group called “Loblaws Is Out of Control,” where shoppers vent about food prices and post pictures taken in stores, grew to tens of thousands of users.

Weston said that vilification was based on mistaken analysis, politics and “lies.” Grocery stores have little ability to impact food prices because they’re mostly locked in during earlier steps in the supply chain — and that’s where he’s seeing pressure now, he said. “Whether it’s disruption in the Strait of Hormuz or whether it’s the cost of fertilizer, which has been peaking recently, even the disruption from El Niño,” he said. “That’s something we’re watching very carefully.”

Weston said out of every $25 spent on groceries, only $1 is profit for the store, which gives companies like his very little room to lower prices.

The parliamentary committee Weston was called before a few years ago eventually released a report that blamed the post-pandemic surge in food inflation on pressure in the supply chain as well as corporate concentration in the food sector. It went on to recommend the government take steps to boost competition among grocery retailers.

In his Friday speech, Weston argued the Canadian grocery industry is already competitive, with American stores Walmart Inc. and Costco Wholesale Corp. two of the largest players by market share in Canada.

Build Canada

Weston urged company executives to work harder to show their companies are investing in Canada, creating employment and helping their communities.

“Young people worry about opportunities in their future, and those of us who are in the private sector, we need to do more to show the rest of Canada that what we do genuinely contributes to prosperity across the nation,” Weston said.

Members of the Business Council of Canada, a major business organization of which Weston is a member, expect they’ll need to find 800,000 new workers over the next decade “to fulfill the ‘Build Canada’ ambition,” he said. “And yet what our young people read, what often parents read, is about how your child’s going to struggle to get a job.”

He said Loblaw does not engage in algorithmic pricing, the practice of using data to change prices based on a variety of conditions, and in some cases personalizing those prices for individual shoppers.

Weston went further by promising to never engage in the practice and cast doubt on whether it would even be possible in physical grocery stores, despite most of the price signage being digital now.

“Just think for a second what they’re alleging the grocers will do,” he said. “That you will walk down the aisle of a store, and the price tag, because it’s digital, will change as you approach the product and raise the price because you’re wearing a nice sweater. It’s total nonsense.”

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