(Vancouver) Profits for Canadian grocers would exceed $6 billion in 2023, according to an estimate from the Center for Future Work. This would be a new record and an 8% increase from the previous year.
This new study claims that grocers have more than doubled their profits compared to the pre-pandemic threshold.
Center for Future Work chief economist Jim Stanford is scheduled to present the findings of his report later Monday at a meeting of the House agriculture committee on food price stabilization.
The report cites data from Statistics Canada, which indicates that food and beverage retail’s net profit margin has consistently exceeded 3% of total revenues since mid-2021. This is more than double the average margin between 2015 and 2019.
Data shows that retailers have taken advantage of the pandemic and its consequences to increase profits, Stanford said in a press release.
Eric La Flèche, president and CEO of Metro, is expected to make a presentation during the first half of the committee meeting.
Last week, executives from Loblaw, Walmart Canada and Empire appeared before the committee.
Major Canadian grocers are facing federal pressure to adopt plans to stabilize food prices. Earlier this fall, the heads of the five largest food companies were summoned by the government to present their plans.
Grocers have also been under pressure to adhere to a grocery code of conduct that is nearing completion. Its supporters say it will help level the playing field between suppliers and big retailers.
Federal Agriculture Minister Lawrence MacAulay said Thursday that he and his provincial counterparts, as well as federal Industry Minister François-Philippe Champagne, would meet to discuss options available to governments provincial and federal if the big grocers did not sign the code.
Loblaw CEO Galen Weston told MPs that the company fears that certain provisions of the code will increase the price of the grocery basket because they give too much negotiating power to large multinational food producers.
He said his company would sign the code, but not in its current form.
Walmart Canada President and CEO Gonzalo Gebara responded to MPs that the company was “not in a position at this time to commit” to respecting the code. He said the current version includes provisions that “create bureaucracy and costs, costs that will inevitably have an effect on sales prices.”
