Agriculture Committee on Feb. 6th, 2023

[François Thibault]

I should let you know that 95% of our employees are unionized. For the vast majority of them, salary is determined during negotiations about their collective agreement when it expires. These negotiations include wages and benefits, such as pension, health care and so on. We offer very competitive wages and benefits.

[The Chair, Liberal, Kody Blois]

Thank you very much, Mr. Thibault and Mr. Perron.

Mr. MacGregor, you have the floor.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you very much, Mr. Chair.

I'd like to thank all of our witnesses for being here today.

Mr. Thibault, I'd like to start with you.

I find it surprising that Mr. La Flèche is not here. I say that because I think your sector is going through a very deep crisis of confidence with the Canadian people. I understand your sector being defensive, and I'll take the shots from you—that's fine. However, you have to understand that this committee didn't just appear out of thin air. It's the result of what we're hearing from coast to coast to coast from our constituents right across all political parties.

I'm curious. Given the state of Canadians' anger with the high cost of food, why wouldn't Mr. La Flèche take the opportunity, as the face of his company, to come here and publicly defend it? Why is he not here today?

[François Thibault]

Well, I'm a leader of the company. I interact with various stakeholders on a daily basis, talking about the operations of Metro, and I'm here today to answer your questions.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Is he not prepared to take responsibility as the CEO? He did the industry committee that courtesy when there was an inquiry about the end of hero pay in 2020. Why is he not giving us that same favour?

[François Thibault]

As I said, I'm a leader of this company and I'm here to answer your questions today.

As for the confidence, I think our customers are showing confidence through their hundreds of thousands of transactions every day.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Okay.

When Loblaw announced the price freeze on its No Name products, I saw that Metro was very quick to make a comment on that.

I think you said something akin to its being a standard industry practice. Am I getting it right? Am I quoting your company right?

[François Thibault]

No, I think we nuanced it. What we said is that we don't accept price increases.... We don't want to process price increases from suppliers during the busy holiday period.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

But in general, that's a trend. What Loblaw announced is essentially what a lot of companies do during the holiday time.

[François Thibault]

I can't speak for them.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

No. I'm asking you to speak for yourself, because you made the comment.

[François Thibault]

We tell suppliers that we will not process price increases during the busy holiday period. Our teams are too busy with merchandising. We want to have stability, and we say there's a pause on.... We don't process it.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Do your companies ever co-operate or collude in setting when that price freeze or break will happen for consumers?

[François Thibault]

Absolutely not. There is no collaboration at all. We self-supply. We don't want to process increases from the beginning of the holiday period until about the end of January or beginning of February.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Going back to the year 2020, when the three companies all ended their “hero pay” on exactly the same day, there was no co-operation or collusion on that?

[François Thibault]

No.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

It just happened by coincidence. Three of the big companies just ended it on the same day.

[François Thibault]

There is no collusion. There is no collaboration on that.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Okay. Fair enough.

I have been hearing a lot of defensiveness from your sector. I understand. Many companies are going through difficult times with the war in Ukraine, supply chain issues and climate change. At this committee we're all very familiar with those subjects. Many different sectors have been going through those same pressures. However, when I hear your defence that your profit margins really aren't that great, I have to counter that, when I look at the statistics, for the grocery sector as a whole, in the last prepandemic year, 2019, the sector as a whole had roughly $2.4 billion in profit. In 2021, that went up to $5.8 billion.

My constituents in Cowichan—Malahat—Langford are looking at figures like that. They are looking at the food prices they pay week to week. You're saying you're really not responsible for this when, in fact, the net profits are showing a different story.

[François Thibault]

What I am saying is that you cannot look at it in absolute dollar terms. You have to look at it as a percentage of sales. We're a big company. Our revenues have increased this year because of inflation and so have our expenses.

When you look at the profit margin as a percentage of sales, whether it's gross margin or net margin after all the expenses and taxes, it has been very stable. In fact, what we said was that our margin in food went down, compensated for by a better margin in pharmacy, but overall it has been very stable.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Yes. It's interesting, because the quantity of food sales has actually been falling since the lockdowns. We have data here showing that in real supermarket sales volumes, there was a major spike, of course, in 2020 when the restaurants closed and everyone was eating at home, but then there has been a collapse all the way up until the present day.

The actual volume of food sales is going down. Consumers in my riding have seen individual food prices go up. Again, I think this is poking holes in your argument.

[François Thibault]

No, I don't think so. You're right about the fact that tonnage has gone down in the industry. We have had a couple of quarters in which tonnage was down. Overall, I think we have maintained ourselves well. I think customers are responding to our merchandising campaigns, and we have been trying to manage the top-line growth with our expenses.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Yes. We're in a state now where Canadians are buying fewer groceries, but they are paying much more for them.

I also want to end on this, because I know my time is ending. We know that this year it's expected that 60% more people per month are going to have to access food banks. Is it true that last year Metro gave an increase in dividends to its shareholders?

[François Thibault]

Now you're talking about capital allocation, which is a different subject than talking about—

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Is it true, yes or no?