‘Shenanigans’: Calls To Boycott Loblaws In August Grow Due To ‘greedflation’

As prices at the grocery store continue to shock Ontarians, some are calling for a boycott of one of Canada’s largest grocery store chains: loblas.

Some claim that it is not inflation that drives up prices at the grocery store, but rather “greed” or price gouging at the hands of grocers.

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In a tweet on Tuesday, TV personality and author Gail Vaz-Oxlade called on others to “join in sending a message to the Loblaws group that they do NOT appreciate profiting from and calling it ‘inflation.'”

“Let’s make it clear that we will NOT tolerate (with) these shenanigans,” he wrote.

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However, in an emailed statement to Global News, Catherine Thomas, vice president of communication at Loblaw Companies Ltd., said that “the idea that grocers are profiting from inflation is completely false.”

“We earn less than 4C for every dollar we sell,” the email said. “This was true before inflation and has not changed for many years.”

Thomas said the industry has been facing “billions of dollars in inflationary pressures, including cost increases and supply chain charges.”

“We continue to do what we can to make sure customers find value in our stores,” the email said.

‘Much more than food’

In an email to Global News, Michelle Wasylyshen, a national spokeswoman for the Retail Council of Canada, said that grocery stores sell “much more than food.”

He said much of the industry’s growth is being “driven by health and beauty sales,” noting that people are returning to work, have started traveling and are attending social events again.

“The hierarchy is that health and beauty have the highest margins; groceries with value added through additional labor (cakes, charcuterie, prepared meals, etc.) sit in the middle; and staples and packaged foods are the lowest margin,” he explained.

Wasylyshen said based on Loblaw’s quarterly results, the company’s retail revenue results were $12.045 billion, an increase of $375 million, or 3.1% compared to the first quarter of 2021.

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Those results show that the food business accounted for a 2.1 percent increase, while drug retailing rose 5.1 percent.

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“When you look at the largest retailers, this is what you have on the adjusted net income measure: $1.9 billion in net income for Loblaw on $53 billion of sales in 2021, so a profit margin of 3 .6 percent,” he wrote.

“Metro has a net income of 4.7 percent for the year ($823 million on $18.3 billion) and Sobeys earned $746 million on $30.2 billion, for a net income of 2.5 percent. cent,” Wasylyshen continued.

She said these are “all within, or very close to, the historical norms for the grocery industry of profits in the range of 2.5 percent to 4.5 percent.”

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Sylvain Charlebois, Dalhousie University professor and scientific director of the Agri-Food Analytics Lab, told Global News that research has shown “no anomalies” over the last five years to suggest “greed” on the part of the three Canada’s largest grocery stores.

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“Over the last five years, we have investigated the financial statements of the three largest grocers in the country, Loblaws, Sobeys, Buyer and Metro,” he said. “And we look at ratios, gross margins and profitability. And there are no, there are no anomalies, I mean, it’s pretty consistent over the last five years.”

The report, co-authored by Samantha Taylor, an accounting professor at Dalhousie University’s Rowe School of Business, found that Loblaws “published consistent gross margins and profit ratios since 2017.”

The report suggests that the company posted gross margins between 29.35% and 31.47% and profits between 1.64% and 3.53%.

“So if there is ‘inflated greed’ in food distribution, we don’t know where people calling for boycotts get their data from, because it’s not, it’s not publicly available,” Charlebois said.

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However, Charlebois said he “can’t say with certainty” that “greedy inflation” doesn’t exist.

“But we can’t really see any evidence that it exists based on the available data,” he said.

Charlebois said he believes the call for a boycott is a “total misunderstanding of how food distribution really works.”

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“The grocers get the brunt of the criticism because consumers can relate from Loblaws to Sobey’s or Metro,” he said. “If there is a problem, it is deeply rooted in the supply chain.”

© 2022 Global News, a division of Corus Entertainment Inc.

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