Are grocery stores greedy or a scapegoat? Group pushes back on feds’ ultimatum
Posted September 15, 2023 2:41 pm.
Last Updated September 15, 2023 2:56 pm.
A group representing grocery stores in Canada is pushing back against the federal government’s ultimatum on stabilizing food prices.
The prime minister is demanding grocery chains across the country reduce costs for consumers or face consequences. CEOs will be at the table next week, as Justin Trudeau summons the heads of the top five grocery chains to a meeting next week.
“They’re making record profits while Canadians are struggling to put food on the table,” Trudeau said.
He wants companies to present a strategy by Thanksgiving to ease the financial pain of filling the fridge.
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However, the Retail Council of Canada says it feels grocery stores are being made to be scapegoats, as the discussion around cost of living continues.
“At the end of the day, it’s really not on the retailers — it’s much broader than that,” said Michelle Wasylyshen, a spokesperson for the council.
She tells CityNews that more than 70 per cent of what you pay for food at your shop is the price from suppliers, and only two per cent is actual profit to the store itself.
“We need to have more players at the table and we can’t just point the finger at grocers,” she explained. “If they don’t have the vendors at the table, whose costs make up more than 70 per cent of the price to consumers, then we believe that we won’t have any meaningful outcomes.”
Wasylyshen argues multiple studies have shown grocery chains are not taking part in greedflation adding if the federal government is serious about reducing food prices, it needs to be calling in food manufacturers and suppliers.
In August, Metro Inc. reported surging profits, with net earnings jumping by 26 per cent that quarter, from $275 million a year ago to $346 million.
Related videos: Canadian grocery chain reports big jump in earnings
That same month, George Weston Ltd. — which holds large stakes in Loblaw Companies Ltd. and Choice Properties Real Estate Investment Trust — said its latest quarter delivered a profit attributable to common shareholders of $498 million. It noted its second-quarter profit was almost 22 per cent lower than the earnings it reported a year earlier.
Meanwhile, on Thursday, it was reported Empire Co. Ltd. earned $261.0 million in its latest quarter, up from $187.5 million in the same quarter last year. That was boosted by the sale of its 56 gas stations in Western Canada to Shell Canada, the grocer said.
In a social media post Friday, Minister of Innovation, Science, and Industry François-Philippe Champagne confirmed he will be meeting with large grocery chain CEOs in Ottawa on Monday.
“I’ve seen the industry’s reaction since our announcement yesterday,” he said in a statement posted to X, formerly known as Twitter.
“Let me be very clear: Canadians deserve solutions from the food sector.”
He says it’s critical industry and the government “act together to stabilize food prices for Canadian consumers and improve competition in Canada.”
My statement following the reactions of the food industry: pic.twitter.com/xYMG1fIyJT
— François-Philippe Champagne (FPC) ???????? (@FP_Champagne) September 15, 2023
NDP Leader Jagmeet Singh says he’ll introduce a bill when Parliament resumes that will crack down on grocery price gouging.
“These greedy CEOs are posting record profits while Canadians are having the hardest time ever to buy their groceries,” he said.
Affordability issues are expected to dominate the fall sitting.
-With files from The Canadian Press
