If I were president of, say, Metro grocery stores, I would jump at the chance. Food inflation is terrible, and by some very unfortunate coincidence, my company’s profits are skyrocketing. Rather than trying to explain to incredulous parliamentarians that these two pieces of information have absolutely nothing to do with each other, I would hasten to design a promotional operation to break everything before one of my competitors wakes up and sees the tremendous opportunity for growth before us.
I would announce in a press conference held in the center of one of my stores that, until inflation is down to 2%—which is the Bank of Canada’s target—my company will transfer to price drops every cent of excess profit. What is a superprofit? Fastoche: you average the profit rate of the five pre-pandemic years to establish the benchmark of what a “normal” profit is. Anything beyond that is superprofit.
Speaking to parliamentarians on Wednesday, on the strength of his recent $2.1 million bonus (in addition to his $730,000 salary), Galen Weston of Loblaw explained that even though his company invests all of its profit in the price of the food she sells, it would make no visible difference to the grocery cart.
I take him at his word. That’s why I would concentrate all of my sum of superprofits on the essentials: milk, bread, flour, eggs, butter, baby diapers. Even for a few pennies per product, the reputational impact would be massive, the amount of free publicity invaluable. The number of customers who would decide to come and take advantage of my discounts would be worth many times the money invested. The key: an increase in my market share, therefore the promise of additional profits for years.
My communications team wouldn’t know where to turn. The slogans would write themselves. “Our profits in your prices”; “Enjoy our profits”; “We give you our profits”; “Our competitors make profits, we make discounts”; “All united against the high cost of living”. This last slogan has been used for a long time by a French chain: Intermarché.
Maximizing my effect, I would announce that, as president, I will receive only a dollar a year until inflation returns to 2%. (My secret? Since I’ve made $5.4 million in the last year alone, and despite trying hard I haven’t been able to spend it all, I don’t think I’ll have too much to worry about. tighten the belt. I’ll reward myself afterwards with a huge retroactive bonus.)
To demonstrate good faith and transparency, I would invite a well-known person in the world of entertainment economy to report on the fact that we really pay our surplus profits in discounts. I would only have one name on my list: Pierre-Yves McSween. Four times a year, the most famous hairy accountant in Quebec would confirm my status as a good “corporate citizen”. “The superprofits, he would say with his beautiful smile, does Metro really need them? »
Obviously, this innovation would provoke enormous resentment among my competitors. They would secretly curse me for betraying my class (profit junkies), and maybe rescind my pheasant hunting invitation. Too bad, I love to trade dirty jokes with “Fitz” about leftists and ex-CEOs of Hydro. This anger would be followed by mad jealousy, then a fierce desire to outwit me. A unique price war would then begin, on the theme of “which company will be the most generous, the most redistributive, the most, let’s say, leftist”.
If I were my own competitor, what could I do to counter what is called the ” first mover advantage », that is to say the advantage obtained by the first of the economic actors to deploy a new concept? It is not enough to imitate him. You have to find something better, and make it look stingy in retrospect. If I were, say, president of Loblaw/Provigo, I would counterattack with, “No to Metro Forced Labor!” At Provigo, we pay you to buy from us! »
Incredulous? As you know, retail companies are pushing us to become our own cashiers. The labor shortage has a broad back. They began long before to make us volunteer employees. With ATMs, the banks turned us into unpaid tellers when unemployment was still over 10%. While employees receive up to $16/h, plus benefits, to do cashier and packing work, we are forced to work for nothing!
This is the big scam that I would be forced to reveal to overtake Metro in its socializing drift. At Loblaw/Provigo, I would say, “When you work for us, we pay you $16/hr to pack your order. Since it usually takes about ten minutes, this gives a discount of $2.60. In the small print, it would be specified that this will only apply to purchases over $100. As ATM traffic increases — ignorant customers thinking they’ll pocket $16 — I’ll be able to fire cashiers and packers and walk away with a bigger profit than before. Do not worry about me.
NOW. If I were president of Ultramar…
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