Profits for Canadian grocers would exceed $6 billion in 2023, according to an estimate from the Center for Future Work. This would be a new record and an increase of 8% compared to the previous year.
Grocers more than doubled their profits compared to the pre-pandemic threshold, this new study indicates.
The Center for Future Work’s chief economist, Jim Stanford, was due to present the findings of his report on Monday at a meeting of the House of Commons Agriculture and Agri-Food Committee which focused on stabilization of food prices.
The report cites Statistics Canada data showing that food and beverage retail’s net profit margin has consistently exceeded 3% of total revenue since mid-2021. This is more than double the average margin for the period from 2015 to 2019. The data shows that retailers took advantage of the pandemic and its consequences to increase their profits, Mr. Stanford said in a press release. “An industry cannot double its profits if it simply absorbs its higher expenses. »
Plans and a code of conduct
Eric La Flèche, president and CEO of Metro, was scheduled to make a presentation during the first half of the committee meeting.
Last week, executives from Loblaw, Walmart Canada and Empire appeared before the committee.
Canada’s major grocers are under pressure from the federal government, which is asking them to adopt plans to stabilize food prices. Earlier this fall, the heads of the five largest food companies were summoned by the government to present their plans.
Grocers have also been under pressure to adhere to a grocery code of conduct, which is nearing completion. Its supporters say it will help level the playing field between suppliers and large retailers.
Federal Agriculture Minister Lawrence MacAulay said Thursday that he and his provincial counterparts as well as federal Industry Minister François-Philippe Champagne will meet to discuss options available to the provincial and federal governments. if the big grocers did not sign the code.
Loblaw CEO Galen Weston told MPs that his company is concerned that certain provisions of the code will increase the price of groceries because they give too much negotiating power to large multinational food producers.
He said his company would sign the code, but not in its current form.
The president and CEO of Walmart Canada, Gonzalo Gebara, responded to MPs that the company was “not in a position at this time to commit” to respecting the code. He said the current version included provisions that “create bureaucracy and costs, costs that will inevitably have an effect on sales prices.”