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Canadian Grocery CEO's Dismiss Claims of "Greedflation" as Grocery Prices Soar

Published 2023-03-09, 03:35 p/m

By Ketki Saxena 

Investing.com – As Canadian grocery prices  soar - up 11.4% year over year at last count - Canada’s top grocers are insisting before a committee of lawmakers that they are not unreasonably profiting off soaring food inflation. 

Galen Weston, head of Loblaw, Metro (TSX:MRU) Inc. CEO Eric La Fleche and Michael Medline, CEO of Empire Co., which operates chains including Sobeys, Safeway and FreshCo say they are in fact helping to keep prices low for Canadians. They blame the price increases on suppliers and the global market.

The major grocers have come under particularly high scrutiny as they post higher profits amid grocery inflation. 

An analysis from Dalhousie University’s Agri-Food Analytics Lab published in November found all three top grocers beat their five-year averages for profit in the first half of 2022, with Loblaw beating its previous best results for the period by $180 million.

The Canadian grocers meanwhile disagree with Dalhousie findings, and state that while profits may have increased, food margins have remained flat, with the higher margins coming from pharmacy, cosmetic and apparel sales. 

Galen Weston told MPs that the company's profit amounts to about $1 for every $25 spent on groceries, iterating that “Reasonable profitability is an important part of operating a successful business”. 

MPs and politicians, however, have lambasted the grocery chains for their perceived “greedflation”.

“How much profit is too much profit?” asked NDP Leader Jagmeet Singh, who is not a regular part of the committee but has made food inflation a key component of his platform.

“Is there no limit to how much profit you can make on the backs of Canadians that are struggling because they can’t afford their groceries?”

Finance Minister Chrystia Freeland, of Trudeau’s liberal party, also commenting on the issue at an event yesterday in Mississauga, saying that “Grocery CEOs have a responsibility to their customers, and they have a responsibility to all Canadians to work really, really hard with all of us to get inflation down and to get prices down.”

Members from the Conservative party, meanwhile, questioned the impact of Liberal government policies like the carbon tax have on the rising costs of farmers and other suppliers from whom the grocers source their products.

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