The feds are going to take a long, hard look at Canada’s biggest grocers to see if they’ve been stocking lies and deception alongside meats and produce in their stores.
What happened: The House of Commons agriculture committee voted unanimously in favour of an inquiry into Loblaws, Empire (Sobey’s), and Metro’s recent profits.
- The Big Three have been criticized for exploiting soaring food inflation (up 10.8% in August) for profits—a practice recently dubbed as ‘greedflation.’
- Gross profits for Loblaws, Empire, and Metro increased by 21%, 27%, and 15%, respectively, over the first quarter of 2022, but have come back to Earth since then.
Yes, but: Grocers insist that profit bumps came primarily from their pharmacy department as people stocked up on high-end products to look fresh and clean as the world opened up.
- A recent academic study also found very little public evidence of greedflation and that profit margins have been “relatively consistent” in years past.
Yes, buuuut: ‘Public’ is doing a lot of heavy lifting in the above mea culpa. Accounting experts told the Financial Post it’s difficult to determine if the pharmacy explanation is true using only publicly available financial statements, hence the need for a deeper probe.
Why it matters: If all goes smoothly, the inquiry will either clear the names of Canada’s grocers or cast some shady business practices into the spotlight—a win-win for consumers.
If the latter result happens, it would be a hit to public reputations already besieged with scandals (read: hero pay, chip wars, Breadgate) and could force major industry changes.