Are grocery shoppers being gouged? Analyst suspects inflation 'profiteering'
As grocery shoppers face sticker shock week after week, some are questioning whether inflation is fully to blame for rising prices.
Nationally, inflation was at 6.7 per cent in March when comparing prices to the same period last year – hitting families in the pocket book at a time when wages remain stagnant.
In grocery stores, shoppers have especially felt the pinch at the produce section, dairy aisle and meat counter.
“I’m a single parent of two kids and it’s not cheap,” said father Marc Maynard. “I can notice it in my budget, you know what I mean?”
While working-class Canadians make difficult choices in order to feed their families, it’s a different story for corporate shareholders closely watching their portfolios.
“I think there’s also a little bit of profiteering going on,” said retail analyst Bruce Winder. “Some companies will say, ‘Hey, you know what? Inflation’s up seven per cent so let’s make sure we raise our prices because we’re going to get less pushback right now.’”
Loblaw, the country’s largest grocery company with brands like Superstore, T & T and No Frills, made a profit of $459-million in the first quarter of 2022 – up 17 per cent over the first three months of last year.
The company disputes the notion it is gouging Canadians or profiteering at a time of high inflation.
“We strongly object to the basic premise of this storyline. The accusation that our food prices are leading inflation is completely false. In fact, for many years, including through the heart of the pandemic, our prices have increased less than inflation, on average,” Loblaw said in a statement. “The grocery industry is one of the lowest-margin sectors in the entire country, and is now facing a range of unusual inflationary forces. Last quarter, we made less than four cents for every $1 we sold. For reference, our higher recent profits were driven by higher-margin sales, like cosmetics, not food.”
For some consumers, the idea of shareholders making more money while they pay higher costs doesn’t sit right.
“They’re making profit. They could pass it on to us consumers, you know. But they don’t,” said shopper Jason Reiswig. “They just keep it for themselves and they get richer.”
UBC Sauder School of Business economist James Brander says corporations have a duty to maximize profits for their shareholders and are under no obligation to forgo profits in order to pass additional savings on to consumers.
“These companies are in business to make profits. That’s what they’re supposed to do for their shareholders,” Brander said. “The profits also allow them to make further investments down the road and that’s actually crucially important.”
He also said the government should avoid instituting any sort of price controls or dramatic tax increases on corporate Canada because that could have negative impacts on the economy.
Instead, he suggested the government target additional assistance directly to those who need it most.
“If there are people experiencing genuine hardship, and there are, the right policy is to help those people directly, as we did for COVID,” Brander said.
Statistics Canada is expected to release the April inflation numbers on Wednesday.
CTVNews.ca Top Stories
Indian envoy warns of 'big red line,' days after charges laid in Nijjar case
India's envoy to Canada insists relations between the two countries are positive overall, despite what he describes as 'a lot of noise.'
Stormy Daniels describes meeting Trump during occasionally graphic testimony in hush money trial
With Donald Trump sitting just feet away, Stormy Daniels testified Tuesday at the former president's hush money trial about a sexual encounter the porn actor says they had in 2006 that resulted in her being paid to keep silent during the presidential race 10 years later.
U.S. paused bomb shipment to Israel to signal concerns over Rafah invasion, official says
The U.S. paused a shipment of bombs to Israel last week over concerns that Israel was approaching a decision on launching a full-scale assault on the southern Gaza city of Rafah against the wishes of the U.S.
Former homicide detective explains how police will investigate shooting outside Drake's Bridle Path mansion
Footage from dozens of security cameras in the area of Drake’s Bridle Path mansion could be the key to identifying the suspect responsible for shooting and seriously injuring a security guard outside the rapper’s sprawling home early Tuesday morning, a former Toronto homicide detective says.
Northern Ont. woman makes 'eggstraordinary' find
A chicken farmer near Mattawa made an 'eggstraordinary' find Friday morning when she discovered one of her hens laid an egg close to three times the size of an average large chicken egg.
Susan Buckner, who played spirited cheerleader Patty Simcox in 'Grease,' dead at 72
Susan Buckner, best known for playing peppy Rydell High School cheerleader Patty Simcox in the 1978 classic movie musical 'Grease,' has died. She was 72.
Jeremy Skibicki has 'uphill battle' to prove he's not criminally responsible in Winnipeg killings: legal analysts
Accused killer Jeremy Skibicki could have a challenging time convincing a judge that he is not criminally responsible for the deaths of four Indigenous women, a legal analyst says.
Bye-bye bag fee: Calgary repeals single-use bylaw
A Calgary bylaw requiring businesses to charge a minimum bag fee and only provide single-use items when requested has officially been tossed.
Alcohol believed to be a factor in boating incident after 2 men die: N.S. RCMP
Two Nova Scotia men are dead after a boat they were travelling in sank in the Annapolis River in Granville Centre, N.S., on Monday.