Inflation: Independent grocers defend big chains

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Inflation : grocers independents defend the big chains

“There is simply no business model in Canada where it is impossible to x27; prevent these increases from being passed on to customers, “says a representative of independent grocers.

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While the price of the grocery cart has increased by 10.8% over the past year, the profits of the major grocery chains have jumped.

An unlikely alliance between Canada's independent grocers and the country's three largest chains is forming amid accusations that grocery stores are responsible for soaring food prices.

The allegations prompted a generally vocal critic of the Big Three to take the unusual step of defending them on the issue of food inflation.

I am by no means an apologist for chains – we have a lot of problems with them, said Gary Sands, senior vice-president of public policy for the Canadian Federation of Independent Grocers, on Thursday.

“But independents are seeing the same supplier increases as chains. Retailers at the end of the supply chain have become the focus of everyone's anger over rising food prices […], but we know these factors are beyond their control. . »

— Gary Sands, senior vice-president of public policy for the Canadian Federation of Independent Grocers

The problem is that food suppliers pass on cost increases to grocers, fact- it is worth.

While vendors used to make only one price increase per year, Sanders noted that they now raise prices two or three times a year, often with increases of more than 10%.< /p>

Independent grocers receive the same staggering price increases from food suppliers as the big chains, he continued.

Gary Sands, Senior Vice-President of the Canadian Federation of Independent Grocers (File photo)

There is simply no business model in Canada where it's impossible to prevent these increases from being passed on to customers, Sands said. grocery inflation, which reached 11.4% in January, compared to the same month last year.

The Big Three grocers posted higher profits in the first half of 2022 than their average performance over the past five years, according to a report from Dalhousie University.

These companies defend themselves by saying that their profits may have increased, but their food margins remained stable.

They say higher margins came from drugstore, cosmetics and apparel sales, while total sales benefited from the migration of consumer spending from restaurants to grocery stores.

Loblaw Chairman Galen Weston told lawmakers on Wednesday that the company's profit was about $1 for every $25 spent on groceries.

Loblaw Chairman Galen Weston (File Photo)

As Canadians try to understand these meteoric price increases, Mr. Sands points to various factors: the invasion of Ukraine, droughts and floods, rising energy and labor costs. #x27;work, border disruptions and avian flu.

“We're all looking for a Sept-Hours guy to blame for the price hike, but he doesn't exist. We can't even just blame the suppliers because their input costs are also increasing.

— Gary Sands, Canadian Federation of Independent Grocers

Mr. Sands — also a member of the committee creating a new code of conduct for grocery stores — said he was happy to have the support of Loblaw, Sobeys and Metro for the measure. I'm looking forward to hearing similar support from Walmart and Costco, he said.

Parliamentary committee unanimously approved motion to invite the leaders of Walmart Canada and Costco Wholesale Canada to testify.

Mr. Sands pointed out that an important part of the grocers' code of conduct has been completed. The committee still deals with areas related to arbitration, enforcement and governance, he added.

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