Grocers turning huge profit
Increase in food prices comes as many Canadians struggle to provide for families
As the cost of groceries continues to skyrocket and supermarket chains chalk up record profits, food advocacy groups are calling out grocers for not doing more to help vulnerable Canadians put food on the table.
According to data released Wednesday by Statistics Canada, inflation jumped by 0.7 per cent compared to one year ago — the fastest the consumer price index has risen in months — largely due to the increased cost of food.
The higher costs mean more Canadians are struggling to provide food for their families amid the economic downturn. According to the Daily Bread Food
Bank, there has been a 5 per cent increase in food bank visits over last year.
Yet at the same time, Canada’s three largest grocery chains recently reported huge increases in quarterly profits at a time when many businesses and workers are suffering.
“Food insecurity has increased pretty significantly — we’ve never seen anything like this before,” said Paul Taylor, executive director of FoodShare, a Toronto-based food advocacy group. Food has become a commodity and large corporations are profiting while others struggle, he said. While Canadians should have a right to food, he said, “we don’t actually have a right to food — we have a right to food if we can afford it.”
“We’ve been advocating for a long time that the government needs to take issues like food insecurity and poverty seriously.”
Taylor said that corporations are announcing higher than usual profits in an environment that forces Canadians to choose between food and other expenses. “These corporations are making major profits while people are hungry.”
The Toronto Food Policy Council told the Star that grocers should demonstrate leadership by reinstalling pandemic pay and looking at targeted outreach to those experiencing food insecurity by providing store gift cards to those in need via distributing partners, such as Second Harvest, a Canadian food charity.
“It is important to note that the gov
ernment needs to play a big role in monitoring and steering the private sector through policies that help address the inequalities we are seeing during the pandemic and beyond,” the council said in a statement.
Over the last decade, food inflation has outpaced general inflation by about 23 percentage points on average across the country, said Sylvain Charlebois, a professor in food distribution and policy at Dalhousie University. “Generally speaking, we are asking Canadians to pay more for food relative to income.”
It is possible that an era of cheap food in Canada has come to an end, Charlebois said. While that can affect food security, it’s not the only factor, he said. Salary increases, too, impact whether a rise in food costs is strongly felt by consumers.
“The problem of last decade is that we haven’t seen salaries go up all that much for many, many groups,” he said.
On Wednesday, Metro Inc. reported a fourth quarter profit of $187 million, up from $167 million a year earlier.
Loblaw Companies Ltd., which reported its most recent quarterly earnings on Nov. 12, reported a profit of $342 million, up from $331 million in the same quarter last year.
On Sept. 10, Empire Company Ltd., which operates Sobeys, reported its most recent quarterly profit of $192 million, up from $131 million the year before.
In a statement, a spokesperson for Loblaws said the company is committed to keeping prices low so as to not take advantage of demand.
“We reiterated that last week when we said publicly that we were resisting pressure to raise prices, at a time when Canadians need value,” said Catherine Thomas, senior director of external communication for Loblaws.
Thomas added that while the company saw an increase in profit in its third quarter, in the quarter before profits declined by 28.7 per cent. Year to date, she said, Loblaw’s profits have declined by 3.5 per cent, in part due to investments in safety and pricing.
“Through a range of company and store activities we are among the largest supporters of food banks and hunger programs in the country.”
A spokesperson for Metro said prices are subject to market fluctuation. “We keep prices as low as possible, often not fully passing the cost of some increases we incur.”
In a statement, Sobeys said that it “will continue to make significant investments through the COVID-19 pandemic through our newly created Community Action Fund.”
The grocer added that it has “invested millions of dollars into local communities across Canada,” and “provided each of our stores with funds that they could direct right into their local community.”
Charlebois said there is nothing wrong with food inflation “so long as it’s reasonable.”
Reasonable increases are typically between 1.5 to 2.5 per cent, he said.