Many KOLs see giant grocers reporting record profits and hastily conclude that these retailers are profiteering at a time when the average Joe or Jane is struggling to make ends meet.
But that may not be the case.
Take Loblaw (one of the biggest grocers in Canada) for example, which has reported record-high profits for the first half of 2022: The grocer made an extra $180 million than its previous high, which translates to an increased profit of $1 million per day for six months.
But that doesn’t necessarily mean Loblaw jacked up prices to increase profits – the key evidence to consider is the company’s PROFIT MARGIN. If profit margin stays the same despite price increases in their merchandise, that is evidence that expenses/costs for goods went up and that the company didn’t pocket any extra money.
Increased expenses may be caused by many factors ie, higher wages, higher transportation costs for goods, and/or higher prices demanded by suppliers such as wholesalers, processors and manufacturers.
And indeed, Loblaws’ Vice President confirmed that this is the case when she told the media that their profit margin has remained static during the period of high inflation.
I am pretty sure that one contributing factor for the grocers’ record profit is that people are cooking at home more and eating out less.
News-plus.ca 