Good evening, Mr. Chair and members of the committee.
Thank you for the opportunity to provide Walmart's perspective on food inflation in Canada.
I want to thank the committee for inviting me today and giving me the opportunity to share Wal‑Mart Canada Corporation's view on this important topic.
I am Gonzalo Gebara, and I was recently appointed president and CEO of Walmart Canada. I may be new to Canada, but I'm no stranger to Walmart, having been part of this business for more than 20 years.
We’re committed to doing our part to help ease the burdens in the food aisles as well as in our general merchandise offerings. If you’ve shopped at Walmart, you’ll know that we are different from our competitors because our core mission is to help Canadians save money and live better.
The Walmart brand is known globally for our EDLP—short for “everyday low price”—pricing strategy. This is not a stunt or a response to the challenging times we are living in. EDLP means that when you shop at Walmart, you know that you don’t need to wait for a sale to get low prices. Every single day, we strive to maintain a price gap compared to Loblaws, Sobeys and Metro. Our EDLP is what differentiates us from our competitors. Reducing the noise of promotional activity also drives consistency and efficiency with our suppliers and helps drive savings for our customers.
With this philosophy, we proudly serve three million Canadians in-store and online every day. We operate more than 400 stores coast to coast to coast. We employ more than 100,000 associates in towns and cities across Canada.
Our financially stretched customers have told us that in these inflationary times our everyday low prices are more important than ever. Walmart has experienced other inflationary environments. I lived in Argentina and led the Walmart business in a country where inflation went from 20% five years ago to almost 100% last year, so I know that our customers and all Canadians are feeling the pain from inflation. That’s why I want to state clearly that Walmart Canada is not attempting to profit from these inflationary conditions.
In fact, Walmart Canada’s gross profit rate for its food business actually declined last year, and our company’s total operating profit in dollars also declined last year. The past two years have presented a perfect storm of external factors that have driven up food prices. These inflationary pressures are passed through the entire supply chain and ultimately impact pricing. While customers only see the final price on the shelf, the reality of food inflation is that there are multiple touchpoints along the way where inflation has taken hold. All stakeholders must do their part to control costs—from processors to suppliers to retailers.
The current challenges don’t change Walmart’s mission to help Canadians save more money to live better. Fighting inflation is in our DNA. We’ve taken a series of concrete measures, including controlling our internal operating costs and identifying improvements in our supply chains to help ensure our customers have access to the lowest prices. In addition, we’ve worked hard to help keep prices down on our private label products, offering savings against many national brands. We’re continuously monitoring our costs so that we can pass on future savings to our customers. We’re doing everything we can to fight inflation and keep prices low, but we also need the government’s help.
We testified at the House transport committee last year on how Canada can create a more resilient supply chain. We’re pleased to see the committee accept our recommendations, and we hope the government does too. We’ve also made other recommendations on a voluntary basis in response to the Competition Bureau’s market study. We trust that the bureau will thoroughly assess all information it receives and make its independent recommendations to the government in due course.
While Canadians are spending more on the everyday items their families need, we are committed to doing our part to help them save money so they can live better.
I would be happy to answer any questions you may have at this time.
Thank you very much.