Thanks, Chair.
Just before I get started, I wanted to share a general sentiment. I think we should be inviting Walmart and Costco as witnesses as part of this study as well. I think that's only fair.
To the witnesses, thanks for being here.
Every day we are hearing from constituents who are struggling with the prices they're paying for essential food items at the stores of Canada's grocery giants. Canadians understand very well that inflation is a complex, global issue. However, in the wake of the bread price-fixing scandal, a cloud of doubt lingers over food retailers and their claims to be good corporate citizens. Canadians are rightly vocalizing their concerns.
Here are some of the facts that I've gathered. Prepandemic and postpandemic profit margin averages in the food and beverage retail industry have gone up significantly—on average from 1.62% to 2.85%, respectively. A year-over-year comparison shows that consumer food prices have increased, on average, 3.7% more than the average price increase of a basket of consumer goods.
Also, net income has more than doubled across the food and beverage retail industry as a whole. We can find evidence in the reported net earnings of each of your companies. Loblaw's net earnings went from just over $1 billion in 2019 to $2.2 billion in 2022. Empire Co.'s net earnings went from $387 million in 2019 to $746 million in 2022.
In terms of sales volumes, we've seen evidence that the sales volumes spiked at the beginning of the pandemic and then have been declining since.
Lastly, you've increased your quarterly dividend payments to your shareholders.
Jim Stanford has said, “if in fact the problem was all driven by supply shocks that supermarkets have merely been forced to 'pass on' to consumers there should have been a REDUCTION in profits”, and, “To claim that supermarkets and other firms are innocent conduits, merely passing on higher costs” is empirically false.
Canadians want to know how you expect them to believe what you've said, which is that your profit margins haven't increased. I think it's fair to say that Canadians feel like the doubling of your profits has been literally at their expense.
Something just doesn't add up here, in my view.
Mr. Weston, how do you explain the massive increase in net earnings of Loblaw, given the facts I've mentioned?