03/03/2016 02:58 EST | Updated 03/03/2016 03:59 EST

Loblaws Food Prices To Be Hiked As Loonie Falters

"That will hurt us and that will be pretty significant in 2016."

TORONTO — George Weston Ltd., the parent company of Weston Foods and Loblaws, will raise prices on some of its food products this year to help protect it from a weak loonie.

The company anticipates raising prices on products from its fresh and frozen businesses, president and CEO Pavi Binning told a conference call with investors after the company reported its fourth-quarter earnings Thursday.

The increases will help to cover the impact of the low Canadian dollar, he said. The loonie has recently been trading at around 74 cents US and is anticipated to remain low throughout much of 2016.

The Loblaws on Queen's Quay in Toronto. (Steve Russell/Toronto Star via Getty Images)

"That will hurt us and that will be pretty significant in 2016,'' he said, explaining the company buys certain ingredients in U.S. dollars.

The drop in the loonie has been a key driver for inflation in Canada as it has pushed the costs of imported goods like fresh fruits and vegetables higher.

Overall, George Weston earned $138 million in the fourth quarter, or $1.08 per share. That compared with a profit of $151 million or $1.18 per share in the fourth quarter of 2014, which included an extra week.

Excluding the extra week in the year ago quarter, the company would have earned $122 million or 95 cents per share.

Loblaws Queens Quay Market at Jarvis and Queens Quay in Toronto. (Photo: David Cooper/Toronto Star via Getty Images)

Sales for the quarter ended Dec. 31, totalled $11.25 billion in 2015 and $11.73 billion in 2014 over 13 weeks or $10.92 billion over 12 weeks.

Weston Foods' frozen business reached double-digit volume gains in the last fiscal year, Binning said, led by demand for doughnuts and pies.

In addition to its frozen business, Weston Foods biscuit business — led by Girl Guide cookies — helped its bakery business earn $527 million in revenue in the fourth quarter.

In the fourth quarter of 2014, the bakery business earned $469 million in revenue over 13 weeks or $438 million over 12 weeks.

Excluding the impact of foreign currency and an extra week in its 2014 financial year, Weston Food sales increased by 10 per cent, primarily due to higher prices, a different mix of products and an increase in volumes.

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