CANADA (Commonwealth Union)_The cost of food is a problem for Canadians as it is for many people worldwide. However, despite accusations of “greedflation”—using inflation to raise prices—the biggest supermarket stores in the nation claim they are not to blame.
The largest grocery chain in Canada, Loblaw, promised that the products sold under its No Name brand will remain frozen for three months despite rising food prices. Galen Weston, CEO of the company, revealed the deal in a marketing email on October 17. It wasn’t well received. Others said it was too little too late, while some called it a publicity gimmick.
The negative response is understandable. Despite recent slowdowns in inflation, food prices continue to skyrocket, with gains reaching a 41-year high. Large firms, especially retailers, are reporting record profits at the same time. In comparison to the same period last year, Loblaw’s first-quarter profit increased by almost 40%, while its net earnings after adjustments increased by 17%.
This predicament has taken a political turn in Canada, where there is a deep-seated mistrust of grocery moguls due to a recent incident involving the rigging of bread prices. Grocery stores have been charged by lawmakers with exploiting inflation to boost prices above what is necessary, a process known as “greedflation.”
The Canadian parliament unanimously approved a measure that charged grocery CEOs with “corporate greed” on the same day Mr. Weston’s letter was received. The federal competition watchdog began looking into the industry on Monday.
However, does the concept of greedflation hold any water? It’s complicated, according to economists.
Families who frequently shop at grocery stores find it difficult to ignore the sharp price increase. In September, food costs in Canada increased by 11.4%, above national inflation of 6.9%. Since 2010, Sylvain Charlebois, a professor at Dalhousie University in Nova Scotia, has been issuing an annual report on Canadian food costs. “There is no safe area for consumers at the grocery store, not even the freezer section,” he said.
The issue is not specific to Canada. Food costs have dramatically increased in the UK as well. In July, bread and cereal prices rose by an annual 12.4% and oils and fats prices rose by a staggering 23.4%. The cost of food increased 13.5% in the US in September compared to the same month last year.
The factors raising food prices are the same in all three nations: a rise in demand for food since the pandemic began, along with COVID-19 breakouts which have disrupted supply. Add to that the conflict in Ukraine, which has impacted the availability of wheat, fertiliser, and other products, driving up prices globally.
The growth of several crops has also been hampered by the bad weather this year, and gasoline prices have increased.
