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Canadian Industry Minister ‘Disappointed’ With Grocers

Canada’s federal Industry Minister has expressed disappointment with the ‘lack of transparency’ Canadian grocery store giants have exhibited on tackling food inflation. So he’s decided to explore options for ‘independent action’…

Galen Weston Witness - © 2023 Spencer Colby - CPHim again? Yes, him. Loblaw’s / Maple Leaf Foods/ Weston Corp. czar Galen
Weston has truly become the poster boy for Grocer Greed in Canada…

Latest chapter in the Food Price saga

Industry Minister Francois-Philippe Champagne has announced he’s ‘disappointed’ in the ‘lack of transparency’ Canadian supermarket giants are offering with respect to their promises to help fight food inflation. So miffed is Champagne that he’s writing a letter to Canada’s Commissioner of Competition, Matthew Boswell, to complain.

His thinly veiled threat to the supermarket chains does not directly state that the government is planning independent action – legislation – to control and reduce food prices. But it’s what nuclear weapons negotiators call, ‘a clear indicator’ of the Minister’s intentions.

In the letter, Chamagne points to ‘record profits’ in the grocery sector over the past year. The implication there is, that’s not acceptable when millions of Canadians are on the verge of starving, or already making though decisions. Like parents skipping meals so their kids can eat. Or choosing between buying groceries or pay the electric bill.

What the letter says

The letter’s message is summed up in Champagne’s assurance to Boswell that he’ll have the full support of the government to take measures that, “further address the concerns of Canadian consumers.”

You don’t have to be the sharpest spoon in the drawer to get the message. Champagne is drawing a line in the sand.

Where the grocers stand

The latest ‘message’ from the supermarket Big 5 came last fall. Champagne called in their head honchos for a top-level meeting in Ottawa. He demanded to know what they were doing, and planning to so, to help fight high food prices and, ultimately, bring them down.

They were happy to report that they would be freezing prices on some grocery items through the tear-end holiday season. And they would be reducing prices in other items as ‘seasonal specials’.

But that’s no more than they do every year at holiday time, to try to maximize their slice of the seasonal spending boom. But the grocers were ‘unable’ (read: ‘unwilling’) to say what they would do to follow-up the holiday freezes and cuts.

Recent developments

Other recent developments on the food price scene seem to indicate a reluctance by the supermarket giants to take further action that might provide relief for financially-strapped consumers.

The announcement that the mega-supermarkets had posted record high profits for 2023 was nothing less than a red-light warning that they weren’t doing all they could to address food prices.

And just this past week, Loblaw’s, the largest by far of the Supermarket chains, had to walk – more like run – back an attempt to reduce their famous ’50 percent off’ clearance discounts to just 30 percent. Consumers raised the roof. Social media users took aim at Loblaw’s, applying searing heat to the brand. ‘Greed’ became a common theme. Government officials raised a shocked eyebrow.

If Loblaw’s top guy Galen Weston was seeing how far he could push the profit envelope without provoking dangerous push back, he found out – in no uncertain terms. Consumers have been pushed to their limits. And the federal government is closer to running out of patience than it’s ever been before.

My take

The grocers now face a lose-lose situation. They will either have to voluntarily freeze and roll back prices on essential food and household items and take a profit hit. Or the government will take unilateral action to, “further address the concerns of Canadian consumers.”

If the government steps in, the grocers lose a tremendously important privilege they have enjoyed up to now. They have been a self-regulating industry, for the most part. They have claimed that competition was vigorous and healthy in their sector. They have claimed that their profit margins had been squeezed to the low single-digits in the past decade. And they have portrayed themselves as victims of the global economic ills that either surfaced or were triggered by the COVID Crisis.

But pending government action will not only curtail their greed, but put their operations under a microscope. Who knows what that will reveal!

Clearly, the grocery moguls are out of touch with the world their customers live in. And they aren’t doing nearly enough to address food prices. They had their chance. Bring on the legislation!

~ Maggie J.

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