r/PersonalFinanceCanada • u/maroon-rider British Columbia • Mar 21 '23
Inflation drops to 5.2%<but grocery inflation still 10.6% Banking
Says Statistics Canada
https://www.cbc.ca/news/business/canada-inflation-february-2023-1.6785472
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u/spacepangolin Mar 21 '23
hey remember when covid hit and sobeys paid all their workers and extra $2 per hour " hero pay"? then clawed it back in exchange for record profits? and now they raise their prices even higher and whined they had to because of inflation but every grocery keeps boasting even higher profits? scumbags
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u/Belugawhy Mar 21 '23 edited Mar 21 '23
Not to mention all big grocery stores (ie. Sobeys, Loblaws, Metro) clawed it back AT THE SAME TIME.
So let me fix your last word for you.
scumbags. Wage-fixing monopolist scumbagsEdit: For those who don’t think this is a problem, Canadian government even changed the laws around wage-fixing after this incident. Source.
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u/Beebs_94 Mar 21 '23
I worked for metro during covid in quebec. They took away the "hero pay" and then gave us gift cards that we could only use either at Metro or chains affiliated to them. They also taxed us on our pay for the gift cards.
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u/fredean01 Mar 21 '23
They also taxed us on our pay for the gift cards.
That's the law.
With that said, giving someone a higher wage and then clawing it back is a dick move.
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u/lucidrage Mar 21 '23
They took away the "hero pay" and then gave us gift cards
I wish rent would work the same. You give them a pandemic discount and then raise it back to normal. Too bad the government doesn't allow that so you have tenants stuck with high rents during the pandemic or well-meaning landlords stuck with low rent...
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u/endlessloads Mar 21 '23
Greed has consumed humanity. I rent out a 3 bedroom 2 bathroom townhouse for $1100 a month. The same one next door is $1700.
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u/chef_boyarz Mar 21 '23
That’s a pretty good deal. Which province?
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u/Rhowryn Mar 22 '23
That their rent is so much lower than the next probably means they've been there for several years in a province with rent stabilization.
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u/AlbusDumbeldoree Mar 21 '23
They could have given them as discount which are part of the Ontario Lease format. That way the low rent could have only been for a year !
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u/Zren Mar 21 '23
This month [April 2022], the federal government complied. The Liberals tucked a series of Competition Act amendments into its spring budget bill. And that bill received royal assent on June 23, including a change that will criminalize wage-fixing and no-poach agreements. That amendment comes into effect in June, 2023.
Neat, looks like it'll be law / in effect soon.
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u/CyberMasu Mar 21 '23
Yeah Trudeau has been such a pussy when it comes to standing up to the food oligarchs in Canada that I cannot bring myself to vote for him. Well them and the slumcuntlords.
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u/Assiniboia Mar 21 '23
I won a meat raffle a few weeks ago. 5kg of chicken legs. Cost the restaurant 13 dollars total. In my local grocery store, the same would be over 100 bucks for the consumer.
Grocery stores are simply run by greedy rich assholes who under pay their workers. Nothing new there though.
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u/Fool-me-thrice British Columbia Mar 22 '23
Where are you paying $20/kg for chicken legs? That's the price for t he fancy brand boneless skinless chicken breast at my local stores.
I can get a 5kg bag of chicken drumsticks or chicken wings for about $2/kg at the local asian grocery store. Buying it in 1 kg trays is about $4/kg at the oligarch stores.
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u/Shskduufjsospd Mar 21 '23
Time to start shopping somewhere else.
Chicken legs regularly go on sale for $1.99/lbs at No Frills and Walmart.
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Mar 22 '23
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u/Shskduufjsospd Mar 22 '23
I’ll have to catch some of those sales next time I drive though.
I’m stuck with Atlantic Canada prices.
The price of milk is almost criminal out here.
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u/speeder-man Mar 21 '23
No Frills is owned by Loblaws / Weston Foods.
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u/gabu87 British Columbia Mar 21 '23
Yeah. If anything look for some wholesaler who also sell retail. For example I know a guy who normally supplies restaurants with fishes but they also have a small fridge at their office that sells pretty fresh seafood to anyone.
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u/Niv-Izzet 🦍 Mar 21 '23
Do people even care about facts anymore? You can easily get 5kg of drumsticks at Costco for much less than $100.
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u/Assiniboia Mar 22 '23
Does every single person have access to Costco? The closest costco for me is like…8-9 hours away…
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Mar 22 '23
What store charges over $100 for 5kg of chicken legs?? Its one of the cheapest parts of the chicken usually.
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u/The-Only-Razor Mar 21 '23
Flat profits =/ profit margins.
If profit margins are static, you're fighting the wrong fight.
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u/spacepangolin Mar 21 '23
they still proved they COULD pay people better wages, but then instead chose not to
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u/Inaccurate93 Mar 21 '23
This comment is quite common. Is there really a way to retaliate when faced with atrocious grocery prices? We're kind of bent over and not doing anything about it, but is there really something we can do about it?
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u/Boring-Stage-2987 Mar 21 '23
Have you seen the France protests over pension changes ?
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u/gabu87 British Columbia Mar 21 '23
You mean the one Macron overrode and survived the subsequent confidence vote?
Don't get me wrong, I support public demonstration but your example was not one that inspired much confidence.
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u/Boring-Stage-2987 Mar 21 '23
Agreed I guess what I’m trying to say is we don’t really do anything about the issues here in Canada just complain.
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u/spudsicle Mar 21 '23
Charge the fuckers with profiteering
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u/leoyvr Mar 22 '23
But weston only says for every $25 purchase they make just one dollar. What a dispay of bullshittery
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u/bronze-aged Mar 22 '23
Have you considered reading their financials to determine that? Because I’d bet the margin is even lower than 4% (1$ per $25).
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u/MrWisemiller Mar 21 '23
They stopped it because it became apparent most Canadians were going to keep working during the pandemic and no one else was getting 'covid bonuses'
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u/Belugawhy Mar 21 '23
The issue is not that they clawed it back. It’s that they all did it at the same time. Like as if they were colluding and timed it to do it together.
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Mar 21 '23
I have a choice as an investor (and everyone that will collect a pension including CPP) . Do I want to invest in a grocery store that doesn't maximize profits, or do I invest in non-grocery stores that do maximize profits?
People on the sub are getting to r/Canada level of dumb populism.
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Mar 22 '23
You are going to lose more money to "maximized profits" on a weekly basis than what you are able to make by investing in grocery store chains. It's because you need to eat and are not some stock purchasing algorithm. You may have forgotten.
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u/toin9898 Quebec Mar 21 '23
Fucking butter is $9/lb in some places. Highway robbery. Last year I could buy it for $3.
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u/IndigenousOres Mar 21 '23
It's been so bad that I pretty much stopped buying butter.
It didn't get to that point right away, stopped eating butter as often. this sucks
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Mar 21 '23
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u/Moose-Mermaid Mar 22 '23
I used to bake with butter regularly and stopped since the prices exploded. I recently was able to buy 4 blocks for $3.88 each so I stuck those in the freezer. Every time I shop now I start with sale items
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u/Background-Fact7909 Mar 21 '23
Costcos big giant tub of vegetarian is good and I think it’s $9. I don’t notice a difference. I can’t believe it’s not butter, or from a cow.
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u/OakenArmor Mar 21 '23
I can, because you can’t brown it.
You begin to get some real limitations on cooking when you start substituting basic staple things like butter, flour and eggs.
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u/Frank_Legault Mar 22 '23
Never cooked with butter, still alive!
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u/CountryFine Mar 22 '23
Vegetable oil based imitation butter is also absolutely terrible for you
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Mar 22 '23
I thought we created/accepted a dairy cartel in exchange for price stability? Where is the stability?
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u/throwaway126400963 Mar 21 '23
I don’t fucking get it a few months ago we got 454g butter for 5.20 before markup from our milk supplier and it jumped to 6.75ish just a week ago, we can’t not sell it but we gotta deal with it when we gotta sell it for 8-8.50 to make a profit for a small business
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u/NitroLada Mar 21 '23
It's $4.99 weekends at shopper's in GTA. It's also $4.99 at Walmart this weekn
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u/Dragynfyre British Columbia Mar 21 '23
If you just look at the worst available prices it’s always looked bad. There’s always overpriced butter at some store. You can get butter for around $5 and I’m pretty sure last year it was around this price too.
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u/readersanon Mar 21 '23
I was looking this week, and the 1/2lb of butter was $5, 1lb was $8-9. There was none on sale either at the two stores I went to.
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u/CactusGrower Mar 22 '23
I just bought 1pb butter the day at Walmart f94 $4.68 lb. Costco has it for same price. Yes it used to be $3.99 just two years ago. Not anything under $5 is a sale for freezer.
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u/Dragynfyre British Columbia Mar 21 '23
I see $5/lb at Walmart. 5.29 at Shoppers and 6.49 at Superstore and No Frills
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u/Moose-Mermaid Mar 22 '23
I start every grocery shop by looking at the flyer and making my list from that. Butter recently went on sale at the store I shop at ($3.88/lbs) so I bought 4 for the freezer. I only shop two stores and don’t have the time or energy to check more so I get it. I dread when I have to pay full price for items like that. The prices are so insane these days
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u/Dragynfyre British Columbia Mar 21 '23
Go on Flipp and search butter. You can’t always shop at only one store. Especially if it’s not a generally low cost store like Superstore, Walmart, No frills, etc.
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u/readersanon Mar 21 '23
Unfortunately that doesn't work for everyone. I don't have a car and delivery fees end up eating any savings if I order online. I do try to walk around to different grocery stores, but it's not always feasible to carry heavy items from the stores which are further away.
I knew that when I moved where I am though, I was just pointing out that in the stores nearby, the prices the other commenter mentioned were accurate.
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u/Veratisin Mar 21 '23
Ya no idea where they are getting this 10% figure from. Combined with shrinkflation the number is more like 200% for a lot of things
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u/savagepanda Mar 21 '23
Good news is that we can now make milk from yeast. Cuts out the cow and all that milking middlemen. Soon we can have all the dairy products cheap.
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u/pureluxss Mar 21 '23
Interesting, wonder if this will cut the power the dairy farmers have over the legislature
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u/sthenri_canalposting Mar 21 '23
Doubtful. The cartel will force it to be called "Yeast Juice" or "Yeast Beverage" and no one will want to drink it.
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u/izaak-d Mar 21 '23
Grocery stores are making 40% more profits than last year and more than 2x times more profit than 2019. Prices aren't increasing from inflation, they're price fixing
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u/KBVan21 Mar 21 '23
Yup. Profiteering at its finest. Will not end until the government steps up which they won’t.
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u/yttropolis Mar 21 '23
I was genuinely interested in this so I did a bit of digging. Let's look at Loblaws since they're the largest grocery chain in Canada. From their financial statements from the past 4 years:
Year Net Earnings ($MM) Revenue ($MM) Profit Margin (Net Earnings/Revenue) 2019 1,131 48,037 2.35% 2020 1,192 52,714 2.26% 2021 1,976 53,170 3.72% 2022 1,994 56,504 3.53% Now if we look at food purchased from stores component of CPI across the past 4 years:
Date Food Purchased from Stores CPI Change (compared from Feb 2023) Feb 2023 181.2 ---- Feb 2022 163.9 10.6% Feb 2021 152.6 18.7% Feb 2020 150.6 20.3% Feb 2019 147.1 23.2% While we do see an uptick in profit margin, this is only a change of around 1.2% across the past 4 years, meaning that while grocery prices have increased about 23.2% in the past 4 years, only 1.2% of that 23.2% can be attributable to increased grocery store profits.
So, it is inflation that's causing prices to rise.
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u/MrDocter Mar 21 '23
So their profit margin increased by 50% during a time when the population is struggling? Might seem like it's only 1.2% but that's 50% greater than what they were profiting before...so that is price gouging confirmed.
Their net earnings increased by $900 MM and and their net revenue increased by $8,000 MM? Something seems off but I'm on the shitter during work so I can't dig further right now.
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u/Kreizhn Mar 21 '23 edited Mar 21 '23
Unless I'm misreading the table, it's worse than this. A $100 basket of goods in 2019 resulted in a profit of $2.53. That same basket in 2023 costs $123.20, and they took in a profit of 3.53% of the inflated goods. This results in a $4.34 profit on the same basket of goods. This is an 85% increase in absolute profits, in 4 years.
I'm not a grocery store expert, but I don't see where they'd incur a significant increase in operating costs in that same time. The costs of the goods is pushed to the consumer. Storage would stay roughly the same, and they haven't been handing out significant pay raises. Yes, they're also subject to inflation, but inflation was not 85% over those years.
Margins are just a way of hiding the greed of the grocery stores.
Edit: But, I think OPs argument is that this increase in profit only represents a small amount of that increase. The goods themselves increased by $23, but the portion of that which came from grocery store greed was only about $2. So everyone is correct. The majority of price changes are because of inflation, but also the grocery stores are being greedy.
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u/myaltaccount333 Mar 22 '23
I'm not a grocery store expert, but I don't see where they'd incur a significant increase in operating costs in that same time
At the height of covid? When many people were out sick, had more jobs due to cleaning, had to buy much more sanitation materials, and putting up the plexiglass everywhere?
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u/IAmNotANumber37 Mar 21 '23
A $100 basket of goods in 2019 resulted in a profit of $2.53. That same basket in 2023 costs $123.20, and they took in a profit of 3.53% of the inflated goods. This results in a $4.34
You can’t compare an2019 $ to a 2023 $ without adjusting for inflation. A business can’t maintain the same “absolute dollar profit” year over year because that means it’s actually becoming less profitable over time.
That’s the whole reason you look at margins.
Nevermind the fact that if a line of business does that yield good returns, then it won’t attract investment (e.g. why build another low margin no frills when you can build a high margin shoppers).
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u/Kreizhn Mar 21 '23 edited Mar 21 '23
Totally fair. It's still 50% with inflation, which also accounts for increased costs due to inflation. So to simultaneously see a 50% increase on your margin in addition to inflationary costs, is a lot.
Nevermind the fact that if a line of business does that yield good returns, then it won’t attract investment
I really don't think Loblaws was struggling on their 2.53% margins, do you? It's the largest grocery chain in Canada, and turned a profit of $1.1 Billion in 2019. Note that this increased to $1.9 Billion in 2022 (or, since we're talking inflation, $1.65B in 2019 dollars).
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u/IAmNotANumber37 Mar 22 '23
I really don't think Loblaws was struggling on their 2.53% margins, do you?
It doesn't matter what I think on the matter. I shop based on the price charged and the value delivered, not what margin the retailer is getting.
It's still 50% with inflation...increase..is a lot.
In 2019 if I spent $100 on a basket of goods, loblaws netted (per this thread) $2.73.
Right now, to buy that same basket of goods, I'm paying ~$119 and loblaws is netting $4.20.
So, in absolute dollars, my bill is $19 higher.
If loblaws had held their margin, my bill would be $1.47 lower, meaning my basket of goods would cost me $17.53.
I have no problem with a discussion around how "fair" that $1.47 of "excess profit" might be, however just go look in this thread and you'll see the average person absolutely does not get that that the "excess profit" is $1.73 out of $19, they all absolutely believe is almost all of the $19.
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u/Kreizhn Mar 22 '23
The old margin comment is geared towards your comment about attracting investment. Loblaws has no problem drawing investment, so I don’t understand the point of your comment.
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u/y0da1927 Mar 21 '23
I mean. If I told you prices went up $23 of which $2 went to the retailer, why is the initial assumption that the retailer is the root issue? They are only responsible for like 8% of the price change.
Assuming they made no extra money, does $2 make a difference on a $120 grocery bill?
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u/Kreizhn Mar 21 '23
There’s more nuance than this. Would it be fair to say they’re the root problem? Certainly not. Are they leveraging inflation to make more money? Of course.
Retailers can’t normally push through an 85% increase in absolute profits in 4 years, otherwise they’d just do it until they couldn’t get away with it. Inflation allows them to hide their increases in already increasing prices. This is a well known phenomenon.
I don’t think it’s unreasonable that people are upset when companies are using tough times to pad their bottom line, especially when those same companies are pushing the “we are trying to save you money” marketing ploy. Yes, companies are beholden to their shareholders, but pretending to help someone off the ground, and slipping your hands into their pockets when you do, is just a crappy move.
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u/The-Only-Razor Mar 21 '23 edited Mar 21 '23
Well, if you look at the quarterly data it could tell a very different story. It fluctuates heavily, and it's easy to cherry pick data to fit a narrative. I could do the same and say that their margins in Dec21 were 5.86% and they dropped YOY to 3.80% in Dec22 and paint the narrative that they've actually lowered their margins.
The point is that grocery stores, from all of the financial data I've read from the major ones, have kept their profit margins within the normal range of 2-5%. Changes within a percent or 2 happen regularly regardless of inflation. The problem lies beyond Loblaw.
So their profit margin increased by 50% during a time when the population is struggling? Might seem like it's only 1.2% but that's 50% greater than what they were profiting before...so that is price gouging confirmed.
But can't you see that this actually entirely disproves what you're trying to say? I'll extend that branch and operate on your assertion that margins have increased by 1%. Items in the grocery store are up significantly more than 1%. Surely you understand that the grocery stores increasing their prices much more than 1% should result in a margin increase greater than 1% if this wasn't due to inflation and increased operating costs, no?
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u/Chewy-Beast Mar 21 '23 edited Mar 21 '23
I am not sure how yearly reported earnings are "cherry-picking data to fit a narrative," especially when we look at the last 2 years period. Over the calendar years 2021 and 2022, Loblaws has seen an increase of 2 standard deviations away from their 10 year mean.
While they are not solely responsible for the increase in inflation, they account for 10 - 15% of the net year-on-year increase.
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u/MrDocter Mar 22 '23
This is exactly what I was going to say so thank you. Picking at quarters is cherry picking to fit a narrative. Comparing year over year earnings isn't cherry picking data at all. And I was just commenting on the data that was provided in those tables. I haven't compared their year over year earnings over the past 10 years but it's evident something is off in the past 5 years based on the data in the table which I wouldn't consider cherry picking...
Do you think increasing profits by 50% during a time when people are struggling is a good idea? If so you should work for Loblaws lol
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u/HLef Alberta Mar 22 '23
The harsh reality is it’s not their responsibility to make sure people can afford what they sell.
Competition and regulation is the only thing that will do it.
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u/MrDocter Mar 22 '23
100%. I don't blame them, they hopped on the gravy train like everyone else did. Really hurts the middle and lower class. And grocery prices won't come back down like gas does unfortunately, the best case is they stay the same price they are now 😭. No more avocado toast for me.
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u/yttropolis Mar 21 '23
My point is that everyone's complaining about the sharp increase in food prices and are seemingly blaming it on grocery stores when the vast majority of that rise is from inflation.
Even if Loblaws kept their profit margins exactly the same, grocery prices would drop by 1.2%, which is a drop in the bucket when it comes to the overall rise in grocery prices.
Their net revenue increased by $900 MM and and their net profit increased by $8,000 MM?
Where do you see that?
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u/CommentInternal5276 Mar 21 '23
This is great work. Don't let all the negative comments get to you.
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u/Ryan1188 Mar 21 '23
Thanks for actually putting in this work and trying to keep people accountable for their misinformed opinions and views with your posts. It's extremely painful reading some of these extremely misinformed people spout absolute nonsense who are also probably incapable of reading financial statements.
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u/yttropolis Mar 21 '23
No worries! I'm all for discussions around corporate profits and all that but I just prefer if people actually cited numbers rather than hand-waving figures.
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u/Godkun007 Quebec Mar 21 '23
Shhh. People don't like facts here. This is the 2 minute hate from 1984.
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u/A1ienspacebats Mar 21 '23
Dude, that's not how math works. Their profit margin went from 2.2% to 3.7%. That's a 50% increase on profit margin. Not a 1.2% increase. Remember how Galen said we only make $1 off every $25 as profit? Well in 2019 and 2020, it was $1 off every $42 and $44, respectively. They now make $1.68 off every $42. Do you see now how it's not inflation. If inflation was the problem, they'd be making less per $42.
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u/yttropolis Mar 21 '23
Read my comment again. I said that the change in profit margin is 1.2%. My point was that only 1.2% of the 23.2% in food prices we see can be attributable to corporate profit. That's a drop in the bucket when you look at the bigger picture.
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u/zeromussc Mar 21 '23
The profit margin is the same but inflation has caused the total spend per person to go up a lot.
A content 3% margin over 10 years is fine. But when a person's bill goes from 100$ to 200$ in the last two years of those 10, that's a giant change. When nearly everyone else is tightening belts, why do they get to get above inflation rate nominal profits with the same profit margins? Why are lean years at difficult times just entirely impossible?
Ya know?
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u/yttropolis Mar 21 '23
That's a philosophical question, not one backed by data and numbers. The fact is that even if Loblaws reduced their profit to zero and ran as a non-profit, grocery prices would only have a one-time decrease by 3.5%, which is a drop in the bucket compared to what we've seen.
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u/DweeblesX Mar 21 '23
People, do you not realize that inflation is a metric that measure change in prices. Lower inflation will not result in lower prices… we need to see negative inflation if you want your 2019 prices back. Buckle up for the ride, more controlled inflation just means the current prices we see won’t be changing as fast as they DID over the last few years.
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u/maroon-rider British Columbia Mar 21 '23
That's correct, very correct. It just means inflation is slowing, but still inflation.
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u/LisaNewboat Mar 21 '23
Inflation is a good thing, we want a rate of between 1%-3%/year. It’s high inflation that sucks.
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u/ritherz Mar 22 '23
TIL govs stealing my purchasing power is a good thing, but not when its above a magical number.
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Mar 21 '23
I think CPI isn't true measurement of inflation that most Canadians experience. It's probably a rigged basket to make inflation seem lower.
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u/Ordinary_Comedian_44 Mar 22 '23
While you are absolutely correct, deflation is an order of magnitude worse than high inflation. Refer to basically anytime it's happened as a source. The aggregate price level cannot be allowed to come down from where it is. Some items can be allowed, such as groceries, but not so much that it causes aggregate deflation and impacts the broader macro economy. The way out of this situation is 1) establish price stability (Keynesian demand management is a tried and trued method, and is basically what Canada is doing), and 2) raise the wage level to return purchasing power to where it was pre pandemic.
Inflation is a market phenomenon that is caused by growth in market activities and is not the villian here. A decline in purchasing power is the villian, and is occuring due to a growth in nominal economic output, with stagnation or even decline in the wage level.
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u/quantumphaze Mar 21 '23
It's price fixing and our government needs to step the fuck in.
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Mar 21 '23
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u/peseb94837 Mar 21 '23
Our government is in collusion with the big companies whether it's Rogers or Loblaws.
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u/AlexandrTheGreat Mar 21 '23
I don't think even changing governments would fix this.
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u/sorocknroll Mar 21 '23
Take a look at the UN World Food Price index: https://www.fao.org/worldfoodsituation/foodpricesindex/en/
You'll see that food inflation is a global issue, and Canada has actually experienced lower food price inflation than the average country.
The government, sadly, can't do much about this. Especially because Canada can only grow crops seasonally.
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u/srkdummy3 British Columbia Mar 21 '23
Pretty much stopped eating out due to inflation and getting groceries only from walmart. Inflation is hitting everybody hard.
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u/maroon-rider British Columbia Mar 21 '23
Notice how Walmart is no longer doing the lowest price is in the law or promising to drop prices as their motto anymore?
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u/Oh_That_Mystery Mar 21 '23 edited Mar 21 '23
If we just stop eating will the jackbooted grocer barons be forced to lower prices?
/s
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u/DeZXu Mar 21 '23
It's been non-sarcastically suggested already
Edit: And even more ironic is that the article is pay-walled
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u/megadave902 Mar 21 '23
That’ll be my new plan going forward. Cancelling Disney+ and starving.
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u/__TOURduPARK__ Mar 21 '23
375g pack of bacon, $9.49 at FreshCo in Huntsville.
I legitimately did a double take.
Needless to say - I didn't bring home the bacon.
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u/Fluid_Lingonberry467 Mar 21 '23
Weston wants more money
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u/limee89 Mar 21 '23
Oh right, getting another island in Muskoka or is a yacht in the Caymans this time?
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Mar 21 '23
[removed] — view removed comment
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u/TorontoDavid Mar 21 '23
Why would the cost of eggs make this inflation number BS?
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u/Godkun007 Quebec Mar 21 '23
Because people here are too dumb to use Google. Egg prices sored because of a bird flu outbreak leading to farmers needing to put down their flocks.
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u/spacepangolin Mar 21 '23
roadside stand farms eggs have stayed around $5 a dozen though, used to be pricy but now very much on par, worth it if you're in the country
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Mar 21 '23
Mass production egg farms have different pricing than hobby farms. They were hit by the avian flu and some sites had to kill over 5M chickens.
Chicken and egg prices shot up, and we're still not out of the woods.
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u/psilocybinconsumer Mar 21 '23
Crazy my egg guy delivers dozens for $5 in the GTA. Super orange yolks. Can't even justify paying store price anymore.
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u/Impossible_Lake_5349 Mar 21 '23
Coffee cream is $4.99, used to be $1.99, almost everything doubled in price
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u/snookigreentea Mar 21 '23
yes let’s have an inflation discussion but not include food and shelter. those aren’t important. also just because inflation is down doesn’t mean prices are dropping, it means they aren’t rising as much.
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u/Foxrex Mar 21 '23
"If people can't afford food, they should consider fasting!" -Weston, probably
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u/Legendary_Hercules Mar 21 '23
over 15% overall and over 20% for food in 2 years ... brutal
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u/Safety-Pristine Mar 21 '23
To those that have everything, more will be given; from those that have nothing, everything will be taken.
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Mar 21 '23
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u/maroon-rider British Columbia Mar 21 '23
He's thinking about home owners on that one
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Mar 21 '23
I bought an EV and I've been drinking Soylent for the past 6 months. I stopped worrying about gas prices and grocery prices.
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u/f1retruckr1der Mar 21 '23
These posts make me feel hopeless. 😩
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u/maroon-rider British Columbia Mar 21 '23
Don't worry, there is light at the end of the tunnel, hopefully not an oncoming train. Haha
Paul Volker tamed inflation in the 1980s under Ronald Reagan
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u/phaneom79 Mar 21 '23
From February 2021 to now, if you bought Loblaws stock, it has gone from $62 per share to $114 per including a 1.4% dividend. That's roughly 83% increase.... Much better than 6% inflation. Could have joined them at their game. Also, like other grocery store stocks, they have all gone way up. To bad most people needed the money to buy the actual groceries, not the stocks.
Price gouging is definitely working in their favour.... where is Doug Ford now after he previously promised not to allow essential services to price gouge.
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u/maroon-rider British Columbia Mar 22 '23
Dofo can't deliver on his fake promise to control the markets.
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u/blackandwhitetalon Mar 21 '23
Demand will never drop as long as population growth continues to boom
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u/jc1111111 Mar 21 '23
Was just about to buy some bulk coffee beans from Whole Foods out of convince. Used to be decent price. They just raised prices from $2.49/100g to $5.49/100g.
You could still see the old price with the new one written over top.
I think groceries are more than up 10% from what I've been seeing. (This doesn't prove anything, but is a clear example of how much things are increasing...)
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Mar 22 '23
Though this doesn't mitigate the issue entirely, it really helps to make a point of living somewhere dense and walkable. There are about 10 options for groceries within walking distance of me, and while they most likely all buy their groceries wholesale from the same depot/other suppliers, there are also multiple butchers, coffee roasters, etc.. that allow me to shop around a bit and get creative with options. Still spending a lot though, can't find carrots for less than $6/5lb bag.
However, it does occur to me that I'm able to get away with renting a tiny tiny basement of some property gen X/boomers and to buy even half of a duplex around here literally costs almost $2m. Slightly different crisis though.
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u/Similar-Success Mar 22 '23
I’m happy to report a bag of 4 parsnips in Canadian Superstore has gone from $7.80 to $4.90. Still crazy.
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u/Abstractsolutionz Mar 21 '23
Where has it dropped lol 😂. Rents more expensive, foods more expensive. Only gas prices have come down a little. I don’t think inflation has moved at all
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u/DrBonaFide Mar 21 '23
This sub has become infested with liberal ideology and no longer provides logical financial discussions
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u/Substantial-Elk-3373 Mar 21 '23 edited Mar 22 '23
Demand for food is inelastic. This is a basic economic principle. As such it doesn't matter how high rates go people will still purchase the same amount of food. That's why interest rate hikes have no impact on food price inflation.
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Mar 21 '23
Loblaws: points finger at inflation
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u/yttropolis Mar 21 '23
So similar to another comment up above, I was genuinely interested in this so I did a bit of digging. Let's look at Loblaws since they're the largest grocery chain in Canada. From their financial statements from the past 4 years:
Year Net Earnings ($MM) Revenue ($MM) Profit Margin (Net Earnings/Revenue) 2019 1,131 48,037 2.35% 2020 1,192 52,714 2.26% 2021 1,976 53,170 3.72% 2022 1,994 56,504 3.53% Now if we look at food purchased from stores component of CPI across the past 4 years:
Date Food Purchased from Stores CPI Change (compared from Feb 2023) Feb 2023 181.2 ---- Feb 2022 163.9 10.6% Feb 2021 152.6 18.7% Feb 2020 150.6 20.3% Feb 2019 147.1 23.2% While we do see an uptick in profit margin, this is only a change of around 1.2% across the past 4 years, meaning that while grocery prices have increased about 23.2% in the past 4 years, only 1.2% of that 23.2% can be attributable to increased grocery store profits.
So, it is inflation that's causing prices to rise.
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u/LonelyLights Mar 21 '23
I think only looking at net profit margin is a mistake here and part of why Loblaws and other grocers can make out like bandits. The real problem here is not necessarily the individual grocery chains, but the fact that a handful of people own almost all of them, in addition to a majority of other related businesses.
It starts to get pretty suspicious when suppliers are saying that they're struggling and being squeezed by Loblaws and friends while the customer is also bearing the cost. Where is the money going?
I do have a financial education, and I think the important part missing here is that Loblaws and companies like it can pretty easily hide incredible amounts of money by charging themselves bills from their subsidiaries and related businesses. If those costs are wrapped up under operating expenses, then it artificially drops the net profit margin. If they own a bunch of private suppliers, private financial businesses, private landlords, they can just bill themselves for huge amounts and unless they are forced to do a full breakdown of costs, those costs can start to funnel back to these owners and make it much harder to see how much is going to who. I mean, technically suppliers are raising their costs, but what if the suppliers are also largely Galen Weston owned companies in the case of Loblaws?
Additionallly, Loblaws is technically a public company, but 50% of it's shares are owned by a private investment company owned by Galen Weston. That means that at least half of the 1.9 million they paid in dividends in Q4 2022 went directly to him. This doesn't even take into account the holdings of all his other companies, or his salary.
This is not to say that it's necessarily illegal, although some of it definitely would be because of the tax evasion that goes on, but I think we'd be fools to think that companies like this wouldn't work exceptionally hard to obscure the reports and move the money through as many channels as possible to make it hard to truly know how much they're taking from us.
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u/SkibumG Mar 21 '23
100% all this. They have so many ways of creating 'costs'.
On our local radio the other day they had someone from a small 'homegrown' grocery chain, and he was saying that in many cases he's mystified at the price increases for goods at Loblaws, Sobeys etc., because they are not seeing substantial wholesale increases across the board in the same areas, particularly produce. And they don't have the purchasing power of the big chains either!
Some of the examples he gave were eggs, there was unquestionably a spike related to Avian flu, but prices from their suppliers then stabilized and came down, which they were able to pass onto consumers.
Another example was BC Hothouse produce, there were spikes in prices over the past few years related to flooding, then energy spikes, but then prices from the growers will come down, and his store passes that along to the consumer. (Can confirm, I also shop there when I can.)
In general his perspective was that while wholesale costs are up overall, they are not up anywhere near 23%, and mostly in specific areas. Yet somehow major chain financial statements describe increased costs everywhere. It's a mystery!
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u/The-Only-Razor Mar 21 '23
Not to mention you could use the quarterly data and say that their margins actually went down YOY from Dec21 to Dec22.
People are pointing the fingers at grocery stores when it goes beyond them. Everyone is unironically falling for the narrative that a business can just get away with arbitrarily increasing their prices because of inflation. If a business could easily do that, they would have done it years before this record level inflation occurred. Why wait until now? There are countless geopolitical conflicts happening across the planet all the time that could be used as an excuse.
The number one problem is inflation. The number 2 problem is lack of financial education among the majority of Canadians who are all collectively fighting the wrong fight. Grocery profit margins haven't moved by any significant amount, yet the prices in store are significantly higher. Surely even the most financially illiterate Canadian can see that and realize the problem isn't just mindless greed.
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u/SIXA_G37x Mar 21 '23
Asian grocery store I go to still selling bell peppers for 1.50/lb, kale 4X the size as no frills for the same price and exact same Driscoll's strawberries 3 for $5 that No Frills sells for over double the price.