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
4th Indian national arrested, charged with murder of Hardeep Singh Nijjar
Homicide investigators in B.C. say murder charges have been laid against a fourth Indian national in connection to the killing of Sikh activist Hardeep Singh Nijjar outside a Surrey gurdwara last year.
'I am angry': Alberta farmers will continue fight over world class motorsport resort
The rolling hills leading to the hamlet of Rosebud are dotted with sprawling farms and cattle pastures -- and a sign sporting a simple message: No Race Track.
Man ticketed after allegedly trespassing again at Drake's Bridle Path mansion to get his bike
A man who tried to access Drake’s Bridle Path mansion earlier this week returned to the property Saturday and was apprehended again for allegedly trespassing, Toronto police say.
Couple randomly attacked, 1 stabbed, by group of teens in Toronto, police say
A man has been transported to hospital after police say he was stabbed in a random attack carried out by a group of teens in Toronto on Friday night.
Millions of Canadians have been exposed to potentially toxic chemicals, and they're not going anywhere
For decades, North Bay, Ontario's water supply has harboured chemicals associated with liver and developmental issues, cancer and complications with pregnancy. It's far from the only city with that problem.
Biden calls Trump 'unhinged,' says 'something snapped' in former president after he lost 2020 U.S. election
U.S. President Joe Biden on Saturday called Donald Trump “clearly unhinged” and claimed that “something snapped” in the former president after he lost the 2020 election.
Wildfire that forced evacuation of Fort Nelson, B.C., caused by tree falling on wires, mayor says
The wildfire that prompted the evacuation of more than 3,000 people near Fort Nelson, B.C., was caused by a tree falling on wires, according to the municipality's mayor.
Switzerland's Nemo wins 68th Eurovision Song Contest
Swiss singer Nemo won the 68th Eurovision Song Contest on Saturday night with 'The Code,' an operatic ode to the singer’s journey toward embracing their nongender identity.
IN PICTURES Northern lights dance across the night sky in southern Ont.
From London, to Grand Bend, Collingwood and Guelph, here are some highlights of Friday night and Saturday morning's northern lights display.