Thank you, Mr. Chairman.
Good morning to all members of the committee.
Thank you for the opportunity to once again appear before the committee to discuss Walmart's leadership in food pricing.
We're here to share how we have been working hard to provide Canadians with EDLP, or everyday low prices. At Walmart, we have always been a disrupter within Canadian grocery. This fact is highlighted in the recent grocery market study by the Competition Bureau. It notes how our entry into Canada brought additional choice to consumers and put pressure on competitors to lower prices.
We recently launched and posted on our website a study by Deloitte showing that when a Walmart store opens in a major metropolitan area in Canada, it leads to a decrease in the price of a general basket of consumer goods, saving Canadian families in those areas almost $1,000 per year, no matter where they shop.
If you shop with Walmart, you know that our EDLP price strategy is what differentiates us from our competitors. Recent news stories have highlighted the significant savings Canadians receive when they shop at Walmart. As I emphasized when I first came to this committee in March, EDLP means providing our customers with consistently low prices on products without having to wait for sales events. This means that customers can trust that prices will always be low at Walmart. We're so committed to low prices that a key internal metric of success for us is our price gap—the difference between our prices and our competitors' prices.
Over the last 18 months, as food prices rose across Canada, we continued to strive to maintain a material price gap lower than our competitors'. Through this period of high inflation, we were diligent in holding our prices flat where possible, and in some cases even lowered our prices. This sometimes required us to absorb cost increases or to reject unjustified cost increases from suppliers. To give you a sense of magnitude, last year Walmart received six times the cost increase requests from suppliers compared with prepandemic levels.
In your last study on food price inflation, you heard from industry experts that numerous factors contribute to grocery price inflation long before the products reach grocers' shelves. As reported by the Retail Council of Canada this fall, more than 70% of the final shelf price represents the cost imposed by suppliers. The vast majority of the remaining 30% goes to normal expenses in running a grocery business.
Government policies and regulations, supply chain disruptions, foreign conflicts, domestic labour shortages and climate change events all have inflationary effects as well, not only on the cost of food for suppliers but also on the grocers' operating costs. This context is important, but ultimately we know that Canadians want solutions.
I have some examples of our company-wide efforts to combat inflation over the last 18 months. We've invested significantly in our Walmart brands, offering 3,000 budget-friendly food and consumable products. Canadians can rely on Walmart brands to save an average of 33% more than national brand prices at our stores. We've expanded our 97¢ program, offering an assortment of pantry staples for less than a dollar by absorbing significant cost increases from suppliers. Our promotional programs, such as Rollback and Save Now, offer savings of around 10% to 40% on thousands of items. This year during the holiday season, we started these programs even earlier than last year. For Thanksgiving this year, we offered a meal at a price lower than last year's price. We launched our December Dollar Days to highlight thousands of items under $10 to help with our customers' holiday needs.
In our submissions to both Minister Champagne and this committee, we have provided policy recommendations that could help the government stabilize and even lower food prices. This includes a more robust Competition Bureau to examine competition throughout the supply chain, including suppliers; harmonizing regulatory requirements to lower the cost of goods for consumers; developing a supply chain labour strategy; and prioritizing regional development agencies to support building Canadian manufacturing capacity in key food sectors—namely, pasta, beans, frozen foods, meat packaging and infant formula.
The whole value chain needs to be accountable for lowering food prices for Canadians. That includes manufacturers, producers, suppliers, retailers and the governments too. As our founder, Sam Walton, said, “If we work together, we'll lower the cost of living for everyone”.
Let me assure you, Mr. Chairman, that more than 100,000 Walmart Canada associates work hard every day to fulfill the objective of lowering the cost of living for Canadians.
I would be happy to answer any questions you may have at this time.
Thank you very much.
