Grocery CEOs make their case

Later today, grocery chain chief executive officers appear before the parliamentary standing committee on agriculture and agrifood. The question, of course, is whether Loblaw Companies Ltd., Metro Inc. and Empire Co. (parent to Sobeys and Farm Boy) have benefited unduly from inflation-fuelled grocery prices. Consumers have been crushed by double-digit price increases, affecting everything from fresh vegetables (up 14 per cent year over year) to dairy (12.4 per cent) to bakery goods (15.5 per cent). The cost of chicken rose nine per cent in a single month.

There are myriad reasons for the price escalation. From the war in Ukraine to increases in food production costs (see: energy costs) to cold weather induced shortages in Spain and so on. We need only turn to the U.K. to gain a bit of perspective. The data company Kantar recently reported that grocery price inflation in the four weeks to mid-February surpassed 17 per cent, leaving British shoppers facing an increase of about $1,300 on their annual bill. . No one’s saying it’s not complicated.

Here’s another angle: listening to Loblaw CEO Galen Weston, relationships with suppliers can be gnarly. In a recent conference call with analysts, Weston said the company continues to face thousands of requests for price increases, some of which, he said, were “unjustified.”

The top challenge for the grocers? That was nicely framed last December by NDP committee member Alistair MacGregor, who asked what would the companies do to restore what he defined as a broken trust with consumers? That was three months ago. By now, CEOs should have clear answers. They won’t have a lot of time on Wednesday to convince consumers they have not taken unfair advantage of an inflationary environment that shows scant signs of ending soon.