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
Four people arrested at National War Memorial in Ottawa as Canada Day celebrations begin
Police officers in cruisers, on foot patrol and on bicycles are patrolling the Parliamentary Precinct, the ByWard Market and the so-called 'motor vehicle control zone,' as the city prepares for Canada's 155th birthday celebrations and possible protests.

Mounties issue 80 tickets in B.C. national park after crashes kill 3 bears in 6 days
Multiple crashes involving bears in a B.C. national park earlier this month prompted a crackdown on drivers in the area, according to the B.C. Highway Patrol and Parks Canada.
Royal Canadian Navy relieves Pacific fleet ship commander for 'inappropriate conduct'
The Royal Canadian Navy says it has relieved the commanding officer of a warship in the Pacific Fleet.
At least 18 dead in Russian missile attack on residential buildings, officials say
Russian missile attacks on residential areas in a coastal town near the Ukrainian port city of Odesa early Friday killed at least 18 people, including two children, authorities reported, a day after Russian forces withdrew from a strategic Black Sea island.
'Extraordinarily rare' Princess Diana portrait goes on display in London
A rare portrait of Diana, Princess of Wales, will be on public display for the first time after it was recently sold for US$201,600 at auction.
2 slain gunmen still unidentified after Saanich shooting: BC RCMP
Saanich police will hold another update on a deadly shooting that took place on Tuesday afternoon, leaving two suspects dead and six officers with gunshot wounds.
Here's what Air Canada and WestJet have said about reducing flights
Two of Canada's largest airlines announced steps this week to cope with delays, cancellations and service issues. Head to CTVNews.ca to read about the changes announced by Air Canada and WestJet.
Poilievre marches with soldier protesting COVID-19 mandates ahead of Canada Day
Conservative leadership candidate Pierre Poilievre joined the final leg of a march led by a Canadian soldier charged for speaking out against COVID-19 vaccine requirements that has sparked promises -- and fears -- of a new wave of protests in the capital.
Convoy organizer Lich to spend at least 5 more nights in custody
Ottawa protest organizer Tamara Lich will spend at least five more nights in custody in Ottawa after she was arrested in Alberta for allegedly breaching bail conditions.