The president and CEO of Walmart Canada says the retail giant is not trying to cash in on soaring food inflation.
Gonzalo Gebara spoke Monday evening before a parliamentary committee examining food inflation, saying that Walmart Canada’s gross profit rate for its food business fell last year, as did its profit. total business operations in dollars.
However, he declined to give specific numbers, saying Walmart Canada had provided relevant financial information to the Competition Bureau.
MPs have lobbied Mr Gebara over the fees and penalties grocers charge suppliers. These fees are one of the topics discussed as part of efforts to create a code of conduct for grocery stores.
Gebara said Walmart Canada recently received a draft code of conduct and is reviewing it.
“We will support any initiative that would bring better conditions and the ability to have more transparency in the whole chain,” he said.
His comments before the committee followed a much-anticipated appearance by executives of Canada’s three largest grocery chains on March 8.
The CEOs and presidents of Loblaw, Metro and Empire told the committee that food inflation is not caused by profit motives and insisted that their food margins have remained low.
Federal politicians have called for more transparency from the food retail industry as food price inflation has far outpaced headline inflation.
Gebara said Walmart Canada strives to maintain a price gap between its products and those sold by competitors, naming the other grocery giants.
He said Walmart is known for its “everyday low price” strategy: “This is not a publicity stunt or our response to the tough times we live in. »
The retailer is doing all it can to fight inflation, Gebara added, including taking steps to control operating costs, identifying improvements in its supply chain and working to keep prices low on private label products.
“The past two years have presented a perfect storm of external factors that have pushed food prices up,” he said. These inflationary pressures affect the entire supply chain. »
Grocery prices rose 10.6% in February from a year ago, while headline inflation was 5.2%.
Over the past year, the Bank of Canada has repeatedly raised interest rates in an effort to stem rising inflation.
Galen Weston, the billionaire chairman of Loblaw, told MPs it was ‘impossible’ that grocers could be causing food inflation, and that the company was making bigger profits on non-food parts of its activities such as clothing and pharmaceuticals.
A report released last fall by Dalhousie University’s Agribusiness Analytics Lab found that the Big Three food companies posted higher profits in the first half of 2022 compared to their average revenue over the past five years. last years.
At the March 8 meeting, NDP Leader Jagmeet Singh repeatedly asked Mr. Weston: “How much profit is too much profit? »
Mr Weston argued that “reasonable profitability is an important part of running a successful business”, while former Empire President and CEO Michael Medline took a similar approach. , saying, “It’s folly to suggest that an unprofitable grocery business is somehow better for customers and better for prices.” »
At the March 8 meeting, Metro and Empire executives both questioned why MPs appeared to exclude US retail giants like Walmart and Costco from their food inflation research. The committee unanimously agreed to invite the leaders of the Canadian branches of these two retailers to speak before them.
– With information from The Associated Press