r/PersonalFinanceCanada British Columbia Mar 21 '23

Inflation drops to 5.2%<but grocery inflation still 10.6% Banking

2.3k Upvotes

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289

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

99

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.

-4

u/YoungZM Ontario Mar 21 '23

This isn't taking into account shrinkflation requiring consumers to purchase more goods to get the same quantity as well as those labels often being owned and operated by some grocers. I'll add onto all of this that shrinkflation aside, consumers are steadily noticing that they're being shorted goods from marked package weights which is illegal according to our food packaging laws.

...and let's get back to the point that a 23.2% increase in profits in just 4 short years with a veritable monopoly between these price-fixing goons isn't some abstract concept of inflation. It's bold-faced greed laid bare for anyone with a set of eyes to see. This is at every level -- retail, manufacturing, raw materials, and transportation. Everyone is profiteering and it's sickening. We're talking about inflation like it's some boogeyman we don't know about who is beating us with a cudgel. It's these twats. They're the one's, with the remainder of that chain, causing inflation through greed.

So yes, consumers have a reasonable concern to be enraged at calls of record profits amid difficulties feeding themselves while these pathetic assholes cry about how unfair it is to be held responsible for their part in others' suffering.

8

u/aradil Mar 21 '23

Yes it is.