Independent grocers defend chains against food inflation accusations
OTTAWA –
An unlikely alliance between Canada’s unbiased grocers and the nation’s three largest chains is forming amid accusations that grocery shops are accountable for larger meals inflation.
Lawmakers took turns lambasting executives of Loblaw Cos. Ltd., Metro Inc. and Empire Co. Ltd. throughout a parliamentary listening to in Ottawa on Wednesday, accusing the retailers of driving up meals costs to pad earnings.
The allegations have prompted an typically vocal critic of the chains to take the bizarre step of defending the large grocers on the difficulty of meals inflation.
“I’m no apologist for the chains by any means — we have lots of issues with them,” Gary Sands, senior vice-president of public coverage with the Canadian Federation of Independent Grocers, stated in an interview on Thursday.
“But the independents are seeing the same supplier increases as the chains,” he stated. “The retailers at the end of the supply chain have become the focal point of everybody’s angst about the rising price of food … but we know these factors are beyond their control.”
At concern are value will increase being handed alongside to grocers by meals suppliers.
While suppliers could have beforehand despatched one value enhance a yr, Sands stated they’re now elevating costs two or 3 times a yr — typically by double digits.
Independent grocers are receiving the identical staggering value will increase from meals suppliers that massive chains are receiving, he stated.
“There’s just no business model in Canada that exists where you can’t help but pass those increases on to your customer,” Sands stated.
Still, the main grocers have been posting stellar monetary outcomes amid excessive grocery inflation, which hit 11.4 per cent in January in comparison with a yr in the past.
All three corporations posted larger earnings within the first half of 2022 in contrast with their common efficiency over the previous 5 years, in keeping with a Dalhousie University report.
Grocers argue that their earnings could have elevated, however their meals margins have remained flat.
They say larger margins come from pharmacy, beauty and attire gross sales, whereas general gross sales have benefitted from shoppers shifting spending away from eating places towards groceries.
Galen Weston, the billionaire chairman and president of Loblaw, advised MPs on Wednesday that the corporate’s revenue quantities to about $1 for each $25 spent on groceries.
While Canadians are in search of somebody accountable, Sands stated rising meals prices come from a confluence components: the invasion of Ukraine, droughts and flooding, larger power and labour prices, border disruptions and the Avian chook flu.
“We’re all looking for a boogeyman to blame higher prices on and it doesn’t exist,” he stated. “We can’t even just blame suppliers, because their input costs are also rising.”
Meanwhile, Sands — a member of the committee creating a brand new grocery code of conduct — stated he was happy to see assist for the code expressed by Loblaw, Sobeys and Metro.
“I look forward to hearing similar support from Walmart and Costco.”
The parliamentary committee unanimously authorised a movement to ask executives of Walmart Canada and Costco Wholesale Canada to testify.
Sands stated a good portion of the grocery code of conduct is full. The committee continues to be coping with areas round adjudication, enforcement and governance, he stated.
This report by The Canadian Press was first printed March 9, 2023.
