Thank you, Mr. Chair and committee members.
Today I am joined by one of our esteemed lab team members, Stacey Taylor, a recognized expert in accounting and food price forecasting in Canada. Please feel free to direct any questions regarding future food prices to her.
As part of the committee's ongoing efforts to address the stabilization of food prices, we aim to address three key issues today: alleged grocer profiteering, price coordination and the grocer's code of conduct.
Let's begin with the topic of profiteering.
We have consistently emphasized that there is no substantiated evidence of profiteering within the food retail industry. To complement our findings from last year's report, it is important to note that gross margins for all three major grocers have remained constant for over five years, as verified by auditors. In most cases, same-store sales growth has fallen below our national food inflation rate as well.
Some experts, including recent committee witnesses, have made claims that grocers are consistently reporting record profits, which may create sensational headlines. However, it is crucial to understand that, due to inflation, companies should naturally report higher profits in nominal dollars each year. Accusations of profiteering in this context are unwarranted distractions. To address real issues, we must put the profiteering debate to rest.
One significant concern we've identified is the prevailing culture of copycatting, price coordination and discount alignment within the grocery sector. An example of this is Loblaw deciding to discontinue its 50% discount policy, citing a need to align discounts with competitors.
Additionally, practices like the so-called three-month blackout period, where grocers request suppliers to freeze prices, can impact retail prices. Metro CEO Eric La Flèche has acknowledged that some food prices will rise in February due to the end of this price freeze, leading to increased price volatility, which is contrary to the desired outcome for Canadians. The ongoing bread price scandal, with three companies admitting guilt for their participation after nearly nine years, is unacceptable. The Competition Bureau should take a more proactive role in monitoring potentially anti-competitive behaviour.
Lastly, I understand that this committee has already heard extensively about the importance of implementing a mandatory industry-led code of conduct. We cannot stress enough how crucial this step is. Mr. Galen Weston's recent testimony before the holidays, where he may have misconstrued how the code operates in Australia and its potential cost to Canadians, needs clarification. The implementation of the code of conduct should be viewed as a priority if this committee is serious about achieving long-term food price stability, as highlighted in “Canada's Food Price Report 2024”.
Thank you for allowing us to present these recommendations. I look forward to engaging in a productive discussion on these pressing matters, Mr. Chair.