Canadian grocers likely to see record profits in 2023: report

The Canadian grocery sector will likely set a new record, with yearly profits estimated to exceed $6 billion in 2023, according to a report by the Centre for Future Work.

This would have profits rising eight per cent from the previous year.

New research by the institute found that food retailers are now earning more than twice as much as profit as they did prior to the COVID-19 pandemic.

The report’s findings are set to be presented at a House of Commons agriculture committee meeting on stabilizing food prices by the centre’s director, economist Jim Stanford.

Citing Statistics Canada, the report said the net income margin on food and beverage retailers has consistently exceeded three percent of total revenues since mid-2021, more than double the average margin between 2015 and 2019.

In a news release, Stanford said the data showed the retailers took advantage of the pandemic and its aftermath in order to increase profits.

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“An industry can’t double its profits, if it is merely passing on higher expenses,” he said.

President and CEO of grocer Metro Inc. is scheduled to present during the first half of the committee meeting.

This will follow appearances from executives from Loblaw Cos. Ltd., Walmart Canada and Empire Co. Ltd. last week.

The country’s major grocers have been under pressure from the federal government to enact plans to stabilize food prices for all Canadians.

Earlier this fall, the heads of the five top companies were called by officials to present their plans.

Pressure is also being placed for these grocers to sign on to Canada’s first grocery code of conduct that is nearing completion. Proponents believe it will play a crucial role in leveling the playing field between suppliers and large retailers.

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The Minister of Agriculture, Lawrence MacAulay, said Thursday that he, along with Industry Minister François-Philippe Champagne, will be meeting with his provincial counterparts to discuss options moving forward should major grocers not sign on to the code.

Loblaw chairman Galen West told the committee last week that the company has concerns of certain provisions in the code that it believes will raise prices for Canadians as it gives too much negotiating power to large multinational manufacturers.

He said the company will sign the ode, but not without revisions.

Walmart Canada CEO Gonzalo Gebara shared a similar sentiment, saying the company is ““not in a position at this time to commit” to the code.

He said the current version includes provisions that “create bureaucracy and cost, costs that will inevitably end up on shelf prices.”

This report was created with files from The Canadian Press