inflation | Merchants decide to lower their prices

Two endives for $6.99. A 4lb bag of apples for $8.99. These are prices that have become far too “embarrassing” for Bruno Desrochers, owner of Provigo de Chertsey, in Lanaudière, who has simply stopped selling these products.

Nathaelle Morissette
The Press

While 78% of Canadians believe that supermarkets have taken advantage of inflation to increase their profits, according to an Angus Reid poll conducted in August, merchants, faced with this outbreak, have instead decided to play with their margins by reducing their prices and even sometimes by removing certain items from the shelves of their store.

“To no longer hold certain products because it’s too expensive, I had never done that before,” admits Bruno Desrochers, an independent affiliate merchant. Like other grocery store owners, he has never lent himself to so many balancing acts with his prices as he does now, an operation he considers delicate. “There are products for which I have cut or lowered the margin. There was a certain embarrassment in selling products that were way too expensive. There are several that we analyze. »

“Pre-packaged salads have increased so much that we have cut our margin, he gives as an example. We make less money in a category, but we still have sales. When they were $8.99 – a price he “didn’t feel comfortable with” – the merchant decided to list them at $6.99. “And often people still find it expensive. »

“We have never experienced such significant and frequent increases,” adds Annie Paquette, general manager of Pasquier food markets, whose two stores are located in Saint-Jean-sur-Richelieu and Delson. “There are suppliers who send us different price lists every month. »

Faced with this new reality, the company could not bring itself to raise prices so frequently. M^me Paquette does not remember having “played” so often with his margins.

In Laval, Michel Dépatie, owner of Marché Dépatie, also juggles “a little” with prices in favor of customers. “But we can’t do what we want,” he recalls. I do not have control over all my costs in store. I don’t remember having experienced something as intense as I am now. »

consumer confidence

Commenting on the survey results, which clearly indicate a loss of consumer confidence in supermarkets, the merchants surveyed say they have not felt any animosity from their customers. “We are on their side, assures Mr. Desrochers. We tell them that we find it expensive, too. We are of their opinion,” he says, adding in the process that he is not shy about revealing to people the amount he himself must pay to offer certain products in his store.

“Perhaps the consumer does not make the difference between the merchant and the sign,” adds Mr. Desrochers.

The big brands

The Press contacted each of the five major retailers – IGA, Metro, Loblaw (Provigo), Walmart and Costco – to get them to react to the survey results and to answer the following question: are they really taking advantage of the inflationary environment to inflate price and reap the profits?

The answer was finally given by the Retail Council of Canada (RCCD), a group that represents the major brands in particular. “Inflation has affected all areas of activity and the retail trade, that’s where we notice it more because we make purchases on a regular basis,” explains Michel Rochette, president for Quebec of the CCCD. . We have to reiterate one thing that people don’t know: supermarket profit margins have barely changed since 2019.”

“Often, when the figures of the big brands are revealed, we associate everything with supermarkets, but there are brands that also have pharmacies and all that, these are other sources of income”, he indicates by making in particular referring to Metro, owner of Jean Coutu, and Loblaw, which manages Pharmaprix.

Mr. Rochette also adds that the chains also play with their prices to avoid excessive increases. “All the businesses do it: discounts on the shelves, circular prices. There have always been price wars. »