A new study says profits for Canadian grocers are growing at a record pace in 2023, reports CityNews Vancouver.
Progressive research institute The Centre for Future Work says yearly profits are predicted to be more than $6 billion, an 8% year-over-year increase.
The study, which also notes that food retailers in Canada are now making more than twice as much profit than before the COVID-19 pandemic, will be presented during a House of Commons agriculture committee meeting on stabilizing food prices.
The study findings are not a good look for Canadian grocers, which have been recently pressed by officials to lower food prices as consumers grapple with inflation.
Executives from Loblaw Cos. Ltd., Walmart Canada, and Empire Co. Ltd. spoke in front of the agriculture committee last week, and earlier in the fall the heads of the top five companies met with officials to talk about their plans to help shoppers. Metro is also scheduled to talk before the committee.
According to the Centre for Future Work report, grocers have been indulging in healthy margins since mid-2021 as the net income margin on food and beverage retailers has consistently exceeded 3% of total revenues, which is more than double the average margin between 2015 and 2019.
Jim Stanford, an economist with the Centre for Future Work, said the data in the study shows grocers took advantage of the pandemic and its aftermath to increase profits.
A government-driven grocery “code of conduct” is also in the works and will supposedly prevent Canadian grocers from raising rates to suppliers, but some retailers believe the move will only raise food prices.
Galen Weston, executive chairman of Loblaw Cos. Ltd., spoke to the agriculture committee and said several factors in the code of conduct would lead to a higher cost of doing business, which will be passed on to shoppers.
