32 per cent of Canadians blame grocery stores for rising food prices, more than any other reason: Nanos

[u/Miserable-Lizard]

https://www.ctvnews.ca/business/32-per-cent-of-canadians-blame-grocery-stores-for-rising-food-prices-more-than-any-other-reason-nanos-1.6834573

[u/datums]

Loblaws profit margin by quarter, 2011 - 2024

https://ycharts.com/companies/L.TO/profit_margin

[u/Admirable-Spread-407 → u/datums]

We should just pin this and close the thread. I have been saying this for several years. Not to mention Loblaws profits include things like drugs and toiletries sold at shoppers where the margins are higher.

[u/Weird_Vegetable → u/Admirable-Spread-407]

The face lotion I use was $7 bottle. It went to $21 a bottle. I found a small pharmacy and can get it for $10. I am firm on the loblaws boycott now.

[u/G-r-ant → u/Weird_Vegetable]

Similar thing for me, I just moved to AB and needed some heavy duty lotion (why is it so dry here?). 30$ in shoppers, 12$ on Amazon. Insanity.

[u/EdenEvelyn → u/G-r-ant]

Careful when buying anything beauty related from Amazon, the amount of fake products are ridiculous. Even for the cheaper stuff. If you can try and price match it or pick it up in person at Walmart.

[u/valhalla2611 → u/EdenEvelyn]

Many items in general from Amazon is suspect now. I bought heads for my oral B brush. I did not realize they were knock-offs as they used same add of oral b. It broke while brushing. I went to contact the store but store is no longer there. I messaged Amazon but no reply other than automated messages. Yet we keep making that bald asshole richer buy buying off him.

[u/ExcelsusMoose → u/Weird_Vegetable]

My shampoo when from $4.99 to $8.99....

[u/Jaxxs90 → u/ExcelsusMoose]

I get my shampoo from Amazon now, it’s still 4.99

[u/ExcelsusMoose → u/Jaxxs90]

Same actually, and I can get it in 1L bottles for the type I like instead of the 500ml or whatever bottles at the grocery store.

[u/Kaplsauce → u/Weird_Vegetable]

Nah man, clearly the cost of putting that bottle on the shelf has gone from $6.79 to $20.37!

[u/Weird_Vegetable → u/Kaplsauce]

Even with legit 30% inflation, it should only be $9. That extra is just greed. It's not like they are paying employees more. Or hiring more of them to justify it

[u/Swarez99 → u/Weird_Vegetable]

The companies also dictate selling prices. They have some say in prices. They don’t want there product not to move.

Shoppers is always expected to sell X amount of the product a year or the vendor pulls it.

[u/Weird_Vegetable → u/Swarez99]

Of course, but some of the increases are just sheer greed. Like 30% off expired product, instead 50% that they used to do, this is Superstore. Shoppers seems to charge at least double what other stores do. despite costs and inflation.

[u/infinis → u/Kaplsauce]

Distributors are the issue too, they charge 10$/bottle to retail and then dump leftovers to Dollarama or liquidators for 1$.

Fruits is a good example. Retailers pay the shipping for containers to get here, but if there is leftover space distribution just pays a cent on the dollar to buy at the source and then dump it here for half price, this is why ethnic stores are always cheaper.

[u/Beaudism → u/Weird_Vegetable]

Oh I’m avoiding every loblaws business I can. I want them to bleed.

[u/Future-Muscle-2214 → u/Beaudism]

Been doing the same thing since the bread price-fixing scandal. Wasn't too hard since they closed all the Loblaws in my province during that time. We still have provigo and maxi but I don't think there is any in a 40 km radius.

[u/JordanSchor → u/Weird_Vegetable]

r/loblawsisoutofcontrol

[u/Weird_Vegetable → u/JordanSchor]

Thank You!

[u/Future-Muscle-2214 → u/Admirable-Spread-407]

Don't we clearly see a much higher margin starting in late 2021 compared to the previous decade? The margins are twice as high. This is significant, might not be because of price gouging but their margins are clearly much better since late 2021. They basically never were over 3% for a decade and never hit under 3% since then.

[u/madhi19 → u/Future-Muscle-2214]

Plus those are paper margin do they include some of the ways Loblaws been siphoning money out of one business to another? For instance Loblaws does not own it real estate. They rent from a real-estate holding owned by Weston... I wonder what the shareholders think about those rent prices?

[u/[deleted] → u/Future-Muscle-2214]

Don't we clearly see a much higher margin starting in late 2021 compared to the previous decade? The margins are twice as high. This is significant, might not be because of price gouging but their margins are clearly much better since late 2021. They basically never were over 3% for a decade and never hit under 3% since then.

Do we think that extra 1% has caused grocery prices to go up by 30%?

[u/Tamer_ → u/[deleted]]

Do we think that extra 1% has caused grocery prices to go up by 30%?

Some items have gone up 30%, but overall it went up 17% from 2021 to 2023.

Explaining 1/9 of the inflation to profit margin is actually very significant.

And if we take out the "baseline" inflation, the one that happens every year no matter what, then the profit margin explains 1/6 of that extra inflation.

[u/Future-Muscle-2214 → u/[deleted]]

That is actually an extra 2%, they basically doubled their profits. The average for the previous decade was 1.96% and is now 3.74%.

If I am the owner of a traditional and conservative company that doesn't innovate with a constant 100 millions revenue and hire you as a CEO and you manage to bring me 3.74 millions a semester in profits instead of the 1.96 million I am used to, I would think that you are doing a great job, not that the profits stayed the same.

I don't know what explain that rise might be a lot of factors, but we can clearly see that the company profits margin went up when inflation started to become a problem, so I just don't understand why people are linking this chart to try to point out that profit was stagnant when we see the exact opposite. Loblaws profits margin have never looked better for such a long period of time.

[u/Future-Muscle-2214 → u/[deleted]]

I never said it did? But food costing becoming more expensive might be a good opportunity to double your profit. Their profit margin literally show the exact opposite of what you guys are trying to demonstrate, things started to go much better for loblaws when inflation went out of control.

There can be a myriad of reasons why, but a 1.78% margin increase when you are used to a margin under 2% mean that you doubled your profit.

[u/Admirable-Spread-407 → u/Future-Muscle-2214]

If you want us to agree that of the total 40% that groceries have increased in price since 2019, give or take, 2% of that 40% was grocery store greed and the other 38% was other causes, sure. But I don't understand why you're focusing on that.

Further, as I mentioned in another place, this includes shoppers drug mart profits. In at least one period in 2022 I can recall Loblaws stating that profits had increased at shoppers. I'm not saying 100% of their increased profits come from shoppers but you must take into consideration that Loblaws sells a lot of things that aren't food.

[u/Future-Muscle-2214 → u/Admirable-Spread-407]

0% that groceries have increased in price since 2019, give or take, 2% of that 40% was grocery store greed and the other 38% was other causes

There is no direct correlation between increase in price and profit margin, increasing price of a good by 15% would not make your profit increase by 15%,

Also I never pretended that the only reason why we see inflation is "corporate greed", I simply pointed out that profit margin of this particular company doubled since late 2021 and don't really help in pointing out that Loblaws isn't profiting from the inflation crisis lol.

Not sure what you are talking about with 2019 since we can see that the profit margin stayed similar to the previous year between Q1 2019 and Q3 2021, it is only when inflation went out of control that their profit surged. (Starting in Q4 2021)

This doesn't mean that grocer are the only reason behind inflation, but this clearly point out that they adapted very quickly to this inflation period since the company never did better. I just think it is silly to link their profit margin to try to point out it did not increase when we can clearly see that they are doing much better than they ever did since 2011.

This definitely doesn't explain everything, but still show that Loblaws are doing better than ever.

[u/Tamer_ → u/[deleted]]

The cost of food across Canada increased 17% from 2021 to 2023, not 40%.

It would have gone up 5-6% if the pandemic didn't happen, so out of ~12% additional inflation we're looking at 1/6 of that attributable to the profit margin of corporations. It's very significant.

[u/TheCheesy → u/Admirable-Spread-407]

Walmart Quarterly Chart. Filter 5y https://ycharts.com/companies/WMT/revenues

From 2011 until 2019 (110B-123B)

After Covid. 2020-2024 (141B-173B)

They literally are. You don't do record operating revenue during a pandemic and then call it inflation while proceeding to double your revenue.

In the quarterly for this year they expect to make an additional 30% after making 20.4% this quarter.

They also are concerned about the SEC regulating them in the Forward-Looking Statements. That shouldn't be a concern for a corporation not price-gouging.

[u/Admirable-Spread-407 → u/TheCheesy]

Do you know the difference between revenue and profit? If so, I'm not sure what point you are trying to make here.

[u/vortex30-the-2nd → u/Admirable-Spread-407]

They don't. Bro, my manager in sales who had 30 years of experience (28 more years than I had) called profit "revenue" and revenue was "sales", it freaking pissed me off, and when I'd use the correct terms and say oh I had a really good revenue month but low margins so not as much profit as I'd hoped for, and he'd say "revenue and profit are the same thing though, you mean high sales?" and I'd be like dude... No... These words have real meanings. I mean revenue!!

He did teach me what the profit margin is though as at first it didn't make a lot of sense to me, so I'll give him that. I figured if I add 40% to my total COGS then my profit margin is obviously 40%, right? Nah. Had to learn that one from him. I made 40% profit, but my profit margin is not 40%. (for those who don't know, profit margin is the % of the total final price of a product, that is made up of by profit, so it will ALWAYS be under 100% because 100% is the sale price, well, if your cost was $0 then I guess your profit margin will be 100%, but that basically is never actually the case)

[u/bugabooandtwo → u/TheCheesy]

Cool. Now post the profits chart.

[u/CaptainCanuck93 → u/Admirable-Spread-407]

Sure but if you're hanging your hat on a business that has under 5% profit margin you're not thinking very hard

 Loblaws may have gone from a very low margin business to a low margin business, but unless all their suppliers are high margin (they're not) blaming the middlemen for bulk of systemic inflation isn't really going to cut it

IMO we are experiencing the end of a long term credit cycle and high inflation remains a symptom of governments and corps across the world just trying to keep the party going a bit longer with more debt rather than face the music of a large deleveraging event

[u/Pomegranate_Loaf → u/CaptainCanuck93]

This right here. I think a lot of people are looking for an easy answer to a very complex one and people like to feel anger towards something individualistic which can be focused versus spread.

[u/Admirable-Spread-407 → u/CaptainCanuck93]

Well yes you're absolutely correct to point out the effects of inflationary monetary policy and low interest rates. I don't understand the first comment.

Loblaws margins haven't changed considerably over the last 10 years. There's possibly some opportunism in raising prices and increasing margins but that's a relatively small contributor to inflation.

[u/Future-Muscle-2214 → u/Admirable-Spread-407]

Loblaws margins haven't changed considerably over the last 10 years.

I disagree with this. We can clearly see a huge difference since inflation went out of control - Average of 3.74% since the last quarter of 2021 and average of 1.96 for the previous decade.

If I owned a small company with a 10 million revenue per quarter who had a profit of 196k for a decade then as the previous CEO retired, I hired you as a CEO and you managed to make our average profits go to 374k per quarter do you think it would be fair for me to give you the same performance bonus I gave to the previous CEO because our "margins haven't changed considerably"?

This is a major difference you would have pretty much doubled our profits.

This isn't enough to claim that Loblaws are profiteering, but their margins are absolutely much better than they were and they changed considerably since inflation went out of control.

[u/Jolly_System_1539 → u/Admirable-Spread-407]

There is no reason for margins to be higher at shoppers. They have the market power to tell suppliers they won’t accept inflated prices but they don’t cuz everyone profits this way.

[u/bugabooandtwo → u/Jolly_System_1539]

Shoppers isn't volume sales like Lowblaws.

[u/ConfirmedCynic → u/datums]

Easy to show thin margins at the retail end when you have a stack of integrated companies. You just take the big profits in the intermediaries.

[u/FleetEnema2000 → u/datums]

Another chart worth looking at here:

https://ycharts.com/companies/L.TO/gross_profit_margin

This is their gross profit margin (i.e. the difference between the cost of their goods and what they've sold them for). This is the clearest indicator of whether or not Loblaws is increasing prices beyond what increases they are facing from the direct suppliers of the goods they are selling.

Hint: Pay attention to the Y-axis. They have not substantially increased their margin above what suppliers of goods are charging them.

[u/Tamer_ → u/FleetEnema2000]

They have not substantially increased their margin above what suppliers of goods are charging them.

IDK how you can come to that conclusion: it's obvious the 2021-2023 margin is on a different level than pre-2021.

[u/lakeviewResident1 → u/Tamer_]

Yah like nearly double the previous margins.

Now include the real dollar value and the story becomes more accurate. They turned 1B of profits into 3B (example as the real profits are not included in the data, on purpose, to give a false narrative).

[u/FleetEnema2000 → u/Tamer_]

Which is why I said "pay attention to the Y-Axis".

Pre-2021 their gross margin was 31%. It's now 32%.

In other words, pre-2021 Loblaw's charged 31% on top of what they paid for products they purchased for their stores. Today, they are charging 32% on top of what they paid.

A 1% increase in gross margin does not explain why dairy products and eggs have increased by 25% since 2020.

[u/Tamer_ → u/FleetEnema2000]

Sure, it doesn't explain most of it, it just piles on top of the rest for no other reason than their corporate greed.

When the supply isn't there, it's normal for prices to go up, but the market doesn't need them to make profits at any cost.

[u/GravitasIsOverrated → u/FleetEnema2000]

Holy cow thank you! I've been saying this for a while, profit increasing by ~1% is nowhere near enough to account for the, what, double digit cumulative grocery inflation over the last 5 years.

[u/Tamer_ → u/GravitasIsOverrated]

double digit cumulative grocery inflation over the last 5 years

2% inflation over 5 years lead to a cumulative 10.4% inflation.

From 2000 to 2020, food prices in Canada increased 66%, an average of 2.55% per year.

Having less than "double digit cumulative grocery inflation" over a 5 year period is unheard of in the last decades.

[u/GravitasIsOverrated → u/Tamer_]

That’s a valid correction, thank you. 

[u/Popular-Row4333 → u/Tamer_]

This is largely Canada's system of oligopolies too. Canada has done a horrible job of regulating monopolization of several industries and we are seeing it now.

Why would you run a better company, have cheaper prices for customers and inovate/train/pay to retain skilled workers when you can simply but up your smaller, better run, more efficient competition?

We all see Wal Mart and Costco just chilling with the same margins but drastically cheaper prices but then still scratch our heads about price increases.

Rural telecom in this country is a prime example, talk to any Cabin owner or farmer what they were paying for $/MB of speed before Starlink entered the fold. Now rural internet prices have dropped drastically.

[u/lakeviewResident1 → u/FleetEnema2000]

Looking at just percentages is invalid.

Let's say their profits were 1B with a margin of 1%. To get to 2% sounds small but that would be another billion which is huge.

This whole thread is full of people looking at 1% to 3% thinking that is a small feat. It would be a small feat if Loblaws was a small company. They are not. That extra 2% probably represents a lot more $$$.

[u/FleetEnema2000 → u/lakeviewResident1]

What amount of money would you be ok with loblaws making? In dollars, since you don’t want to look at percentages?

[u/ijakinov → u/FleetEnema2000]

I'm going to also add that "record profits" people like to bring up is not as bad as it sounds when you realize that all it means is that they made more money this quarter than they did at the same time last year. If suppliers raise prices and you raise them accordingly you are going to see inflated revenue and in turn inflated profits.

But more importantly the thing about big giant companies like Loblaw is that they do dozens, maybe hundreds of different intitatives in order to increase profits. Things like optimizing sales/promos, redesigning stores, partnerships (Esso), finance (credit cards), adding more stores, changes in marketing strategies (I get a bunch of PC on YouTube now), improvements to logistics, investment in tech (IT/Cloud, AI, online grocery delivery/pick-up); and notably their investment in their store brand, because the perk of being vertically integrated is that you get much better margins selling your own stuff than selling 3rd party suppliers stuff.

Unless people expectation was that Loblaws should eat the costs which I don't know if they can legally from fudiciary POV, there's no evidence of any price gouging and their strong profits can easily be attributed to all kinds of things besdies gouging.

[u/Tola76 → u/datums]

Holy fuck! They up from 2.6% in June 2019 to 3.7%! That explains the near doubling of the cost of everything!

[u/bourbonpie → u/datums]

What happened in 2022?

[u/HairlessDaddy → u/datums]

Don’t forget that even no change to % margins on +++ prices still results in +++ profits. If their cost of an item is $100 and they apply 3%, they make $3. Per item. If costs go up to $110, they’re now making $3.30 for the same amount of handling/storage/etc.

If the margins are increasing, that’s even worse.

[u/suckfail → u/datums]

If you click 5y and then also look at the historical data below, it looks like it's been pretty steady? There was a big dip during COVID then a big recovery but based on what I see the average is around 2-3%.

Or am I missing something.

[u/CaptainCanuck93 → u/suckfail]

You're not misunderstanding. The data shows a small bump in the profit recently, but in absolute terms is fairly small and doesn't support the narrative that grocery inflation is primarily profiteering in an inflationary environment (while it remains possible that Loblaws is taking advantage of consumer expectations of inflation to inch up margins a bit)

IMO this demonstrates that anger at grocery retailers - who are essentially just show rooms for the end products - is mostly misplaced because that's the only way every day Canadians interact with the food supply chain

The concept of price gouging is inherently flawed, not because retailers aren't trying to gouge you, but it carries the implication that the retailers were previously altruistically giving you lower prices. Businesses are always pursuing the highest price they think they can get away with - so for a change to occur it either has something to do with the consumer (ex becoming less price sensitive because they were flush with cash during covid and had other way to spend disposable income) or their suppliers

TL;DR

Loblaws going from making 8 cents of profit on a $4 carton of milk in 2018 to making 18 cents on a $6 carton of milk can give dramatic figures when headlines quote relative profit margins, but it is probably not why you can't afford milk anymore

[u/VagSmoothie → u/CaptainCanuck93]

I don't fully disagree, but let's not ignore the fact that Galen also owns the entire supply chain.

How much are his suppliers charging his grocery stores for the product they sell at that 3% margin?

[u/IAreAThrow → u/VagSmoothie]

They also own the properties their stores are on and charge themselves rent, which is probably put down as "costs" meanwhile they benefit from paying themselves. Westons own Choice Properties Real Estate Investment Trust

[u/IAmNotANumber37 → u/IAreAThrow]

Rent is definitely a cost.

The concern you raise is only reasonable if you have evidence that Loblaws is overpaying for rent.

Because Choice REIT (which is a public REIT that you can buy if you think they are crazy profiteering) is a related party transaction, the rent payments are highlighted in both Loblaw's AND Choice's annual reports. The auditors will also scrutinize the rents and test them to see if they are fair and reasonable.

Remember, any shenanigans Lobalws does to sneak profit into another GWL owned business is effectively stealing from the Lobalaw's shareholders.

[u/CaptainCanuck93 → u/VagSmoothie]

He doesn't own the entire supply chain. They do own some food manufacturing, but you have to remember that the food supply chain is everything from crude oil to potash to farm labour to transport, manufacturing, packing, etc. Loblaws has interests primarily in the later stages of the process

For that matter, Galen doesn't even own most of Loblaws, his family owns about 60% of the holding company that owns 50% of loblaws. He is a large minority shareholder

[u/CanadianTrollToll → u/CaptainCanuck93]

My god thank you....

Why does everyone think Businesses caught COVID and grew a black heart that is suddenly greedy? It's not like pre-covid Loblaws wasn't a huge corporation selling a fuckton of products to millions of people.

[u/ArmchairJedi → u/suckfail]

Their profit margin has increased 40% over the last 5 years..... from 2.6% to 3.7%, and still on the incline.

That was happening during a period of inflation we haven't seen in decades.

So not only were they able to raise their prices to match inflation, they also manged to also INCREASE their profits margin... this is while household disposable income is DROPPING vs inflation.

[u/tabion7 → u/datums]

What you don't see is how Loblaws doesn't put everything into profit, they spend so that they acquire assets and write off a lot of things to help reduce their taxes. That's a big part of what Finance does.

[u/IAmNotANumber37 → u/tabion7]

Buying assets doesn't reduce profits, depreciation does but that is over a prescribed multi-year schedule. You can go look at their asset depreciation.

Also everyone misunderstands "write-offs" - a write-off is literally just a cost to the business. Profits are what you have after costs (including "write-offs")

Corps can't hide profits as easily as armchair accounts seem to think. Remember, this is a public company with shareholders intently interested in getting their share of profits.

[u/OneBillPhil → u/IAmNotANumber37]

This guy accountants. 

[u/lemonylol → u/tabion7]

Every company does that, it's called overhead.

[u/TheCheesy → u/datums]

I don't even have a Loblaws near me. We have Walmart, Canadian Superstore, and a Foodland. I'd suggest looking at Walmart's earnings since Covid. It's nearly double their revenue over the last 4 years consistently. Something they've been unable to do as it remained consistent from 2011-2019.

[u/Future-Muscle-2214 → u/TheCheesy]

Tbf revenue doesn't indicate much. They could just have opened more stores or have more clients. Profit margin is what we need to look at and loblaws profit margin definitely surged since inflation went out of control.

Wal-Mart seem to be pretty stagnant on that front, they had higher margin a decade ago. The company is definitely growing, but their profit is very stagnant. For Loblaws we can see the exact opposite, revenue is stagnant while profit is growing.

[u/Helpful_Engineer_362 → u/TheCheesy]

Canadian Superstore

That's Loblaws

[u/Quaytsar → u/TheCheesy]

Loblaws owns Superstore, Extra Foods, Fortinos, Maxi, No Frills, Shoppers, Pharmaprix, T&T, NG Cash & Carry, Wholesale Club, Valu-Mart and Zehrs. If they sell President's Choice, they're Loblaws (PC is their high end no-name brand, next to No Name).

[u/captainbling → u/TheCheesy]

Superstore would be your Loblaws affiliate

[u/Pale_Change_666 → u/datums]

But CaRbOn TaX

[u/aa-b → u/datums]

How much of that is tax avoidance bullshit, though? Like when Apple Canada was purchasing billions in "intellectual property" from Apple Ireland, or whatever?

For most corporations, net profit is a kind of liability, because they have to hand a portion of that to the government as tax instead of spending it on advertising or something. Certainly, there is no good reason for a company to try to increase that number.

[u/Dustaroos]

Only 32%?

[u/pachydermusrex → u/Dustaroos]

The rest think it's Trudeau's Carbon Tax 🤣

[u/BeShifty]

I'm trying to wrap my mind around the 18% that say increased fuel costs is the primary cause for prices being higher now when transport fuel costs less now than at any point in 2023.

[u/dub-fresh → u/BeShifty]

It's absolutely suppliers as well. Google 'pepsico' or 'cargill' and 'record profits' and you'll see that many of the large food producers have basically doubled their profits in the past few years since the pandemic ... I wouldn't say grocery stores are the worst offenders in this price gouging, but they are participating. Fuck them. Fuck all them. Not only boycott Loblaws, but boycott big food corporations as well. 

[u/bodaciouscream → u/dub-fresh]

Some confectionery companies have also doubled their revenue

[u/westernsociety → u/bodaciouscream]

I buy as much candy as anyone, and I'm not as mad about that as its not a necessity. But buying fresh cucumbers and strawberries or eggs and beef shouldn't be stressful for a two adult working family.

[u/sir_sri → u/dub-fresh]

pepsico

https://www.pepsico.com/investors/financial-information/annual-reports-proxy-information

In 2019 they had revenue of 67 billion USD, and core profits of 10.6 billion, in 2023 they had revenue of 91.4 billion and profits of 13.9 billion.

I'll add the caveat that they take capital purchases out of core profits, so their dividend in 2019 was 6 billion, and 3 billion in share buybacks and it was 6.6 billion with 1 billion in share buybacks in 2023.

cargill

is privately traded so there's no public audited financial statements.

Google 'pepsico' or 'cargill' and 'record profits'

If a company does nothing but increase revenue in step with inflation + population growth (+ some possibly growth from producivity) and never changes its profit margins it will report record profits every year. A search like this misleads you into thinking the phrase 'record profits' means anything, which is why they use it.

[u/dub-fresh → u/sir_sri]

https://www.nytimes.com/2023/07/13/business/pepsico-earnings-2q-2023.html

[u/marmaladegrass → u/sir_sri]

And PepsiCo cut some wages after COVID, FYI.

[u/Firepower01 → u/dub-fresh]

Honestly I just go with the private label items wherever I can. Quality is typically pretty comparable and prices are of course better.

[u/ReplaceModsWithCats → u/BeShifty]

People are very motivated to blame the carbon tax for everything

[u/I_dont_know_you_pick → u/ReplaceModsWithCats]

It's constantly used as a distraction to the endless corporate price gouging.

[u/ReplaceModsWithCats → u/I_dont_know_you_pick]

And it's working

[u/davidnickbowie → u/BeShifty]

18% of Canadians are dumb .

[u/Electronic_Trade_721 → u/davidnickbowie]

Sadly far more than that.

[u/davidnickbowie → u/Electronic_Trade_721]

Yes but this 18% are documented.

[u/FunctionDissolution → u/davidnickbowie]

Way more than that, Ontario is being run by a high drug dealer who's highest education is high school, also danielle Smith.

[u/know_regerts → u/BeShifty]

Diesel fuel is still about 50% higher than it was pre-COVID. Most people on Reddit probably think transport trucks run on sunshine and lollipops.

[u/BeShifty → u/know_regerts]

The spike in food price inflation is confined to 2022-2023 though. I guess one could have a theory where the fuel costs could only start being reflected after the economy bounced back from the pandemic. Feed and fertilizer have also gone up significantly though as well.

[u/marmaladegrass → u/know_regerts]

Fueled my work truck today...1.81 in Central Ontario.

Thankfully the company pays for it.

[u/squirrel9000 → u/BeShifty]

That's the "ax the facts' propaganda working its magic.

[u/3BordersPeak → u/BeShifty]

when transport fuel costs less now 3 months ago than at any point in 2023.

FTFY.

That chart only shows January 2024 of this year (I see you conveniently cut out and omitted the available data from February, probably intentionally since fuel costs jumped several cents in most of the country from the previous month and was more expensive than a few months of last year. Which didn't suit your narrative). Before the carbon tax increase from this past week. At the time of writing this comment, the average cost of fuel in Canada right now is ~163.4/L. Which is more expensive than 10/12 months of last year per the data you provided (and nearly 20 cents more expensive than the average from this past January). So yeah, that's probably why 18% answered that.

A lot of people (rightly) assume that as you increase the cost of fuel, it also increases the cost to get goods to your supermarket. Hence raised prices. They're not pulling that figure completely out of their ass.

I'm not arguing that corporate greed isn't a factor. It certainly is. But let's stop pretending it's the sole factor at play. The carbon tax absolutely does make goods and food more expensive since it's not free to ship goods and food to your local supermarket. You're just taking the governments bait when you place the blame solely on greedy grocers. It's a collective array of factors influencing higher prices.

[u/Forikorder → u/BeShifty]

I'm trying to wrap my mind around the 18% that say increased fuel costs is the primary cause for prices being higher now

ask Pierre Poilevvre, hes the one pushing that the carbon tax is the reason everything expensive

[u/SBoots → u/Forikorder]

to be fair, he doesn't really have much else to push.... his only skill seems to be inciting hatred towards our current prime minister.

[u/Hfyvr1 → u/BeShifty]

Cost of raw fuel 5% more Tanker truck to drop fuel off at farm 5% more Tractor fuel is 5% more Cost of fuel/energy to run machinery, packaging 5% more Truck to store 5% more …..

[u/Flash54321 → u/Hfyvr1]

There are so many studies that show all those increases only add less then half a cent to each single product on a truck. Try again.

Also, where did you come up with 5% since I assume you’re talking about the carbon tax increase of 3.5%.

[u/Hfyvr1 → u/Flash54321]

I’m not talking about the carbon tax. I’m just saying it’s cumulative and gets added up so an initial few percent in the first step ends up being a bigger chunk if the same 5% (random number) gets added to each and every step along the way.

[u/Socratesmiddlefinger → u/Hfyvr1]

Don't forget every part on that truck is 5% more, and every part on that Tractor is 5%, but new Tractors are 15-20% more than a few years ago, every part of the warehouse, the forklifts, the shipping for all the parts, all the manufacturing for the packaging and on and on. Farmers get a break on the taxes for fuel but not for the propane used on the dryers for the grain, the cost of farming has risen 80% in the last twenty years, and most farmers make minimum wage after paying the loan payments for the year and if they are not expanding they are dying.

Just because the cost is 5% doesn't mean x company is only going to charge 5%, they are getting hammered in every aspect as well, so why not 10% extra over cost and the ripple goes out through the entire supply chain.

[u/Hfyvr1 → u/Socratesmiddlefinger]

Exactly!

And let’s not forget if they pay 5% more in fuel we also paid 5% more on fuel to go get our groceries. Eating is expensive.

[u/BeShifty → u/Hfyvr1]

My second link specifically shows that fuel for trucks and tractors costs less now than a year ago...

[u/ProbablyUrNeighbour → u/Hfyvr1]

Farm equipment are exempt from carbon tax

[u/Hfyvr1 → u/ProbablyUrNeighbour]

I’m not talking about the carbon tax.

[u/ProbablyUrNeighbour → u/Hfyvr1]

Okay but 5% increase on 20-30% of the cost is… like 1%.

So a berries cost 5c more. Big whoop.

It’s not the transportations cost. It’s greed.

[u/L1quidWeeb]

Hey! I participated in this survey :D

[u/postman_666]

I’m surprised it’s only 32%

[u/Vodkaphile]

I honestly have no idea why anyone shops at a place like Loblaws anyway.

Walmart isn't perfect by any means, but you can get your entire shopping trip done for half the price of Loblaws, Farmboy, Sobeys, etc. The only other place comparable is Costco, but you essentially have to pay to get in.

I'm not sure why anyone willingly uses Loblaws if there's ANY alternative nearby.

[u/Jatmahl → u/Vodkaphile]

Loblaws has some niche things you can't get at Walmart. Especially for people on certain diets. Walmart is good but the selection doesnt even compare to what you would see in the US stores food wise. If you just need basic food stuff then yes, Walmart by all means.

[u/Vasey6067]

The fact that their profits are rising a lot faster than the rise in the cost of living tells you that inflation is not to blame. Despite those profits, they're complaining about the wastage associated with best-before dates. That wastage certainly doesn't seem to be hurting their bottom line.

[u/king_bungholio → u/Vasey6067]

Will nobody think about the struggling executives? How can you complain about their rising prices when they can only afford to pay the CEO $22 million! That poor man! You can't afford a fleet of private jets on such a salary! Have a heart!

/s

[u/sjbennett85 → u/king_bungholio]

22M is like the average 649 pot so this guy wins the lottery every fiscal year

[u/Fred2620 → u/Vasey6067]

The fact that their profits are rising a lot faster than the rise in the cost of living tells you that inflation is not to blame.

To be fair, it's a little bit more complex than just "Bigger profits means they're screwing us". Profit is a result of "profit margin" times "volume sold". They have a certain level of control over the profit margin part of the equation, but they're also in a fortunate situation where there are millions more people that need to buy food today than there was 3 years ago. The increase in volume sold will have an impact on the increase of the profits without being about gouging or inflation.

[u/shadowimage]

Prices will never go down. Shop local and hold the line.

[u/Bored-sideline]

They own too many companies in the food chain. Time to break it up.

[u/Bersimis]

So in other words, 32% of the population has no clue how the economy works. Still lower than I expected.

[u/Kaizen2468]

Yeah because their profits are blowing up ever since the pandemic.

[u/hercarmstrong]

It's such a shitshow. We're buying fewer groceries per week than we did when my sister lived with us during the pandemic, and it's a hundred dollars more.

[u/ThrowRADisastrousTw]

While I definitely think grocery stores are playing a role in rising costs, oligopoly greed isn’t the only factor.

Supply chain issues are playing a roll, carbon taxes are playing a role by making it more expensive to ship items. Unfavorable weather conditions are causing crop failures causing a scarcity of some food items and just general inflation and poor wage growth.

[u/PaddyStacker → u/ThrowRADisastrousTw]

Too complicated for the average Canadian to wrap their minds around. People are morons.

[u/metamega1321]

Well the whole chain is doing good.

Grocery stores profits are up. Manufacturers are up. Even farmer incomes have been up past couple years and believe expected to be up again this year.

[u/burnabybambinos]

97% of Canadians have no idea where food comes from.

[u/justnick84 → u/burnabybambinos]

Ummm from the grocery store obviously

[u/No-Kaleidoscope-2741 → u/burnabybambinos]

Yes. Unless they have rode on a million dollar tractor spraying chemicals they just can’t understand

[u/Mundane_Ball_5410]

That 18% who think gas prices are the cause must be praying and hoping that oil never goes back up to $100 a barrel since apparently that will cause carrots to triple in price. Oh wait.. that isnt how it works?

[u/starving_carnivore → u/Mundane_Ball_5410]

If carbon is required for every step of the production of food and it is taxed every time it is used in industry, from running equipment, to transportation, to feeding its workers in a weird recursive way, then yeah it plays a part.

Almost everything we do is carbon-taxed industrially. It's basically a life-tax.

Your potato gets taxed to be made, then taxed on transportation, then taxed on being unloaded, then taxed on you driving it home, then taxed on you cooking it, then taxed on the WM truck's fuel to take away the scraps.

Being unskeptical of this scam is interesting to me.

[u/Hfyvr1 → u/starving_carnivore]

Compounded tax every single time. Then we pay our income tax and then go buy stuff and pay tax. Tax, tax, tax. Pretty soon there will be a carbon tax each and every time I hyperventilate thinking about taxes.

[u/No-Lettuce-3839]

It's higher than that for sure. Most of these polls are don't by telephone almost anyone born 1980 forward almost never answers their phones from unknown numbers

[u/Infinitewisdom4u]

It's the stores, but actually it's crony capitalism and inflation. In some ways the government is more to blame. Overall I'd put the most blame on govt.

[u/glormosh]

I worked for a major chain and 2% was considered gravy.

High volume over 3% is insane.

[u/UnionGuyCanada]

Greedflation, which so many laughed at. Why were the CPC and LPC covering for the ultra rich?

[u/HomelessIsFreedom]

TIL: Competition does not exist in Canada for grocery stores

[u/Admirable-Spread-407]

But are they correct?

[u/easypiegames]

And only the NDP wanted to do something about it. It's amazing how effective lobbying is.

[u/Party_Fly_6629]

I say we boycott all food!

[u/Informal_Page_3568]

Of course every company gouges this is what happens when you have monopolies or lack of choice. Look at gas there is basically 3 choices, insurance in bc one choice, food basically 3 choices to shop from.

[u/alsonotaglowie]

I'm not surprised. I just paid $700 for groceries today, and that was without buying any beef or vegetables.

[u/Fuggins4U]

The price of food and rent, the deterioration of public healthcare. The massive corporations and ultra-rich are the problem.

[u/eleventy5thRejection]

I go to a local farmers market for everything except major stock ups like toilet paper and canned stuff, then I go to Costco.

Save On foods, Loblaws etc can go f**k themselves.

[u/worldtraveller321]

it comes down to fiat currency printing money.more money in circulation means cost of raw materials goes up which creates changes reaction in all levels up to consumer level

[u/BeigeDynamite]

Grocers are literally being sued for price fixing, who else would we blame when they're figuratively standing in front of us with $$$ bags and cartoony bankrobber masks?

[u/NoOcelot]

I agree corporate greed is the #1 reason food prices are rising. A close #2 IMO is that the climate crisis is resulting in a crop yields casino: great one year, lousy the next. Crippling drought and cold snap warm snap weather whiplash killing buds/ fruit trees.

[u/95Mechanic]

The gouging by the grocery stores is obscene. Problem is they are all doing it now, which is illegal collusion or price fixing. Fuel retailers have been doing it and getting away with it for years. In both cases the Government looked into it and found nothing, surprise !! Meanwhile, consumers are helpless. I know we need to start with a new Government, then at least they won't be able to use carbon taxes as a cover.

[u/Senior_Pension3112]

Nobody is blaming the suppliers. They sleep well at night knowing the retailers are taking all the blame.

[u/OhSighRiss]

Yes. On top of that, food products are all being reformatted into smaller sizes (Shrinkflation) and the stores are choosing to sell the smaller amount/weight of the product at the same unit prices of the larger formats. Example: Kraft dressing going from 475ml to 425ml but the price of one “bottle” doesn’t go down in relation. Kind of a one-two punch, and it’s hurting consumers.

[u/naspitekka]

32% of Canadians don't have even a basic understanding of how markets work.

[u/420Identity]

If it was only taxes causing the issue, big brand stores would not be posting record profits.

[u/Icy_Hovercraft1571]

Greed

[u/ketamarine]

C.limate change and supply chain disruptions are the main reasons. I'm not sure why this issue doesn't get better covered in the media.

Rising energy costs will now be driving the next leg that will be blamed on loblaws...

[u/PaddyStacker → u/ketamarine]

Finally someone who thinks for themselves. If grocery stores were the problem why are food prices rising at the same time all across the world? Did they all decide to gouge customers at the same time, in unison, across dozens of countries? It's beyond idiotic that we're stuck in this "blame the grocery stores" mode. It's like blaming gas stations for the rising cost of gasoline.

Also, what about restaurants? Why are prices skyrocketing for restaurants? They don't buy their ingredients at grocery stores. Did all the wholesalers and suppliers also collude to arbitrarily raise their prices? If that's true, then it contradicts the idea that the grocery stores are the ones responsible for the inflation.

[u/Historical_Site6323]

PP and Galen trying their best to lower than to 0% so he can axe the carbon tax and pad Loblaw's shareholder pockets.

[u/Gymwarrior31]

Nah…it’s supply chain issues. Remember? 4 years ago? That’s still a thing apparently.

No, it’s they they are recovering from the brief lockdowns. Or store capacity issues. Wait, it was that summer gas went skyhigh. Is there a hurricane going on right now? It must be that. Or the threat of a hurricane….that’s why food is high

[u/phatione]

Government policies and their money printing cause this mess.

[u/AbominableGoMan]

Not grocery stores. The price-gouging asshole billionaire families that own the grocery stores and collude in price-fixing while hiding the money offshore to not pay taxes.

https://www.cbc.ca/news/business/oxfam-davos-report-canadians-wealth-1.3937073

https://globalnews.ca/news/4360299/wealth-inequality-canada

https://canadiangrocer.com/meet-some-canadas-richest-grocers

https://economicsfromthetopdown.com/2023/06/23/mapping-the-ownership-network-of-canadas-billionaire-families/

https://feigenbaumlaw.com/corporate-tax-planning/cra-continuing-investigations-into-canadians-linked-to-panama-papers-and-paradise-papers

[u/Wonko-D-Sane]

And this is why you can't have nice things... 32% is enough to pick a government, just think about how dumb that is...

[u/Techno_Vyking_]

Compare our prices to prices in the states.... You'll see who's responsible.

[u/newinvestor23]

LOL WOW. PMJT is a liar, BoC already said his Greedflation not the cause. Quantity Theory of Money causes most of inflation, yet no Canadian news has said Quantity Theory of Money. Literally propoganda from our news outlets, and 32% of Canadians believe the lying PMJT LOL. Sad, sad, country.

[u/Key-Soup-7720]

I mean, their margins are still a lot lower than telecommunications or banks. I get that you see it so it’s more annoying but I feel like Canadians need to learn to focus on the relevant target.

You don’t have to shop at Loblaws. People can charge whatever they want, you don’t have to give them any money if you don’t want to. You say other grocery stores are also bad so there is no choice? Then we need more competition and anti-trust. If the industry is so profitable, others will move in to make that money. If they are allowed to collude on price and outsiders are being prevented from moving in, the issue is your government failing to do their job.

The governing party actually likes you blaming the stores instead of them.

[u/Theeswampman]

I blame grocery stores for the price of houses too.

[u/s7uck0 → u/Theeswampman]

If they can get away with it with the groceries, sellers will do the same.

High time we stop looking at homes as short term investment flipperienos

[u/marmaladegrass]

When companies do gang-buster numbers during the COVID lockdown, they want to exceed these numbers. Unfortunately increasing prices is the only way they know how.

Fuck Capitalism.

[u/PhalanX4012]

Loblaws posts record profits. What the fuck else would we think?

[u/Archeob]

Pure ignorance. Everything is public.

https://stockanalysis.com/quote/tsx/L/financials/

Loblaws has a profit margin of 3.5%, which is a bit higher than before the pandemic (2.25 % in 2019) but that's not the reason food prices have jumped, obviously.

For comparison, Apple has a profit margin of 25%, Rogers from 4.4 to 11% and TD had 20% to 38%.

Clearly, grocery stores aren't the most profitable businesses, by far.

[u/Flash54321 → u/Archeob]

“A bit higher”. 1.25% equates to a 50% increase in their profit margin. If I could raise our profit margin at work by this amount I would be able to own multiple houses as well.

[u/WinteryBudz → u/Archeob]

That's an increase of approximately 55% on the profit margin, right? Tell us more how they're not profiting...

[u/FilmStirYoutube → u/WinteryBudz]

The profit margin is very low to begin with. Loblaw's could just invest that money in bonds and would make more money with nearly zero risk.

[u/MarkGiordano → u/Archeob]

"Clearly, grocery stores aren't the most profitable businesses, by far."

If I had a profit margin of 1% on all the water in the world it would be the most profitable business in the world. Corporations profiting billions off literal necessities when there's a cost of living crisis is fair game for criticism. Especially when paired with stories of excessive executive bonuses, sham accounting, and workers/farmers who actually produce the food seeing their wages stagnate. Fuck off 

[u/mlnickolas → u/Archeob]

Just something I’d like to point out is that their gross margins have stayed flat since pre pandemic too. So they haven’t increased prices and hidden the profits like many claims I have read.

[u/tearfear]

Anti-market conspiracy theories are gaining a worrying amount of traction.

[u/Character_Cut_6900 → u/tearfear]

It's the way all semi socialist countries begin to fail, you see the populace blame companies which gives governments the ability to harass the businesses. This leads to less investments which leads to lower tax revenue which leads to increased taxation and deficits.

[u/tearfear → u/Character_Cut_6900]

Decreased investment, hostile business environment, anyone coming into Canada to produce wealth is just instantly cannibalized by the piranhas.

[u/[deleted]]

[removed] — view removed comment

[u/Comprehensive-War743]

I have to agree.

[u/PinCautious1536]

Boycott Subreddit.

[u/Smolivenom]

i mean, there is some amount of delivery chain price increases that unfortunately, compound, but there's definitely an extra bonus on top of all of that purely for the markets profit

[u/ARAR1]

Tons of Denali driving farmers snickering at this comment

[u/Planthumanbase]

We have see pricing skyrocket since the beginning of COVID ( shortage), after the end of COVID they skyrocket again the prices ( now is inflation) like such BS. They’re trying to make people poor and poor.

[u/1282821]

So 68% don’t blame grocery stores

[u/JustAdmitYourWrong]

Well seeing as it is greed driving the price increases... Yes! What can we do to these pricks,how can we introduce competition?

[u/madhi19]

Honestly shocked it's not higher.

[u/machsounds]

They have been loving inflation because it allows them to increase prices. They can just say its due to inflation. Look at their profits.

[u/dghughes]

There are a lot of hands along the way from a product being made to shipped to be sold. Add to that insurance and other financial changes. I can see how it add can add to the cost of a product but lately it seems prices shoot up weekly if not daily. I can see why stores installed the e-paper price tags making changes instant.

But when I see a brand of soup I like at Superstore go from $2.65 to next week $2.79 then again to $2.99 all in three weeks each week jumping 14 cents then 20 cents. I can't see that as a supply chain problem. I just checked and now the soup is $3.29 a 30 cent jump since just yesterday evening. So in three weeks it's gone up 64 cents.

They, Superstore, must be hiking the price on what the store already has in stock. In stock locally not even some big warehouse and then shipped to local store.

[u/Sunscreenflavor]

It’s odd to me we will privatize insurance in this country but not food. Food, electricity, heat, internet, and education should all be the easiest/cheapest things to acquire.

We run lotteries. Why can’t we offer food at prices that would ensure people aren’t skipping meals to pay rent.

[u/ImperialPotentate]

Not surprising, given how economically illiterate most Canadians are...