Thursday, March 09, 2023

Can we really constrain supermatket food prices?

Canadian grocery chains have been hauled before a parliamentary committee to justify their increasing profits at at a time of high inflation, when many Canadians are having difficulty paying their weekly grocery bills and putting food on their families' tables.

At least that's the narrative being set before the CEOs of Loblaws, Empire (Sobeys) and Metro this week. Accused by many of deliberately fuelling "greedflation", the execs represent the main chains of grocery and food stores in Canada (excluding American-owned chains like WalMart, CostCo and Amazon, as they were quick to point out).

And they were adamant in their claims that they were not profiteering or exacerbating the inflation problems, merely responding to increasing costs in order to maintain their "reasonable" profit margins (about 2.5% in the case of Empire, 4% in Loblaw's case). Galen Weston of Loblaws maintained that their increased profits is actually mainly generated by their non-food departments, like pharmacy, apparel and beauty, which together make up about half of the company's total business, although it is impossible to check that claim (which in itself is perhaps surprising - you'd think that information would be publicly available in the company's financial statements).

When you think about it, though, it's kind of bizarre that they are being castigated for making profits, whatever the tribulations of the working and non-working poor. I mean they are just doing what every other business is doing, aren't they, trying to make as big a buck as possible on the free market? Following the laws of supply and demand, pricing their goods at what they think the market can stand? How is that against the Canadian way of life? Can we justifiably constrain the prices they charge? For luxury foodstuffs as well as the basics?

Personally, I might actually like to see price controls on basic foods (don't ask me to define "basic", though). But I don't see how that can be done within the current capitalist system.

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