You are right to cry when you go to the grocery store. The price of food has indeed increased significantly over the past two years.
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Based on consumer price index data compiled by Statistics Canada for the period from June 2021 to June 2023, I calculated that the basket of food purchased in stores jumped 21.1% in Quebec.
For comparison, know that this is equivalent to about twice the increase in wages granted to Quebec workers during this same two-year period, which plays between 10 and 10.5%.
Who has benefited the most from this dramatic increase in the cost of grocery shopping? Farmers, producers, distributors, transporters or food supermarkets? You will not be surprised to learn that all these beautiful people pass the buck by throwing the responsibility for the soaring prices on each other.
SIGNIFICANT GROWTH IN PROFITS
One thing is certain, the large food distribution companies Metro and Loblaw benefited greatly from the rise in food prices by recording growth in their sales volumes and, above all, a solid appreciation in their net results (profits). And this, to the great benefit of their respective shareholders, who have seen the shares of their respective companies jump on the stock market.
Under the senior management of CEO Eric R. La Flèche, Metro operates 950 grocery stores under several banners, including Metro, Metro Plus, Super C, Marché Adonis and Ontario supermarkets Food Basics. In addition to the Jean Coutu and Brunet drugstore chains.
According to Desjardins Securities analysts, growth in Metro’s net earnings per share over two years should reach 23.8%.
For its part, Loblaw controls some 2,400 supermarkets in all Canadian provinces, namely Maxi, Provigo, Loblaws, Freshmart, No Frills, T & T supermarkets. Plus the Shoppers Drug Mart and Pharmaprix chains.
On the side of the Ontario giant Loblaw, whose board of directors is chaired by Galen G. Weston, also president and chief executive officer of the parent company George Weston Limitée, Desjardins analysts project an appreciation of net income of 37%.
Concretely, the good financial results of Metro had the effect of making the action jump by 26%, for an increase in the market value of the company of 3.58 billion dollars during the last 24 months.
At Loblaw, the number 1 supermarket in Canada, it was downright a stock market explosion as the stock jumped 59%. Loblaw’s stock market capitalization increased by $14.4 billion.
A word now on Empire, the other food giant in Canada, headquartered in Nova Scotia. The company has 1,600 grocery stores nationwide. Its main brands are IGA, Sobeys and Safeway.
Surprisingly, this other major food player in Canada does not seem to have “benefited” from the rising cost of groceries, at least for now. The growth of its net results would be limited to 7.3% over the two years. And that’s probably why the action of the company Empire vegetates on the stock market.
GROCERY CART
Which foods have risen in price the most over the past two inflationary years?
- Beef: 24.7%
- Butter: 28.9%
- Grain products: 27.1%
- Fresh fruit: 25.8%
- Baked goods: 23.5%
- Canned vegetables: 28.1%
- Edible fats and oils: 51%
- Fresh vegetables: 20%
On the other hand, there are still two essential foods whose prices have increased more reasonably. I am referring here to fresh milk (+10.2%) and eggs (+10.1%).
Between the two “extremes”, we find a panoply of foods whose prices have increased considerably more than the increase in wages. Here they are:
- Fresh or frozen pork: 17.6%
- Fresh or frozen chicken: 16.0%
- Fish and seafood: 16.2%
- Cheese: 19.4%
- Coffee and tea: 19.7%
- Non-alcoholic beverages: 15.3%
In addition, note that personal care items and accessories sold in grocery chains and their pharmaceutical subsidiaries have increased in two years by 13.6%.
As a consolation prize, I would point out that over-the-counter drugs and pharmaceuticals rose by only 4.3%.
A little pill with that? Know that the price of prescription drugs has risen by just 1.7%!