The chief executives of Canada's major grocery stores defended food price inflation during an appearance before a parliamentary committee in Ottawa.
The CEOs rejected claims that high food prices throughout Canada are due to price gauging and that their profit margins on groceries have remained low even as costs rise for consumers.
The CEOs and presidents of Loblaws (L), Metro (MRU) and Empire (EMP.A) appeared before the parliamentary committee amid political calls for the industry to be more transparent about what is driving their record profits and hurting the wallets of Canadians.
Grocery prices rose an average of 11.4% this past January compared to a year earlier, nearly double Canada’s overall rate of inflation of 5.9%.
At the same time, there has been a rise in corporate profits among major grocers. Loblaws gross profit in the first half of 2022 beat its previous best results by $180 million.
Galen Weston, the president of Loblaws, said his company makes most of its profits from financial services and pharmacy sales, not groceries. He added that Loblaws’ profits amount to about $1 for every $25 spent on groceries.
Members of the parliamentary committee said at a news conference that the grocery chains have a responsibility to be transparent about why food prices in Canada are so high.
However, it is not clear what, if anything, the parliamentary committee can do about the current rise in food prices.
Despite the record profits, the stocks of Metro and Empire have each declined over the past 12 months, while Loblaws’ share price has increased 4%.
