A new study from Dalhousie University has found that the three largest grocery stores in Canada have earned higher profits this year compared to their average performance over the past five years. Grocery sellers have also been accused by critics of so-called greedy inflation, suggesting they are profiting at a time when food prices are rising at the fastest rate in more than 40 years, and researchers say the lack of transparency in their financial results does not help. Sylvain Charlebois, co-author of the Agri-Food Analytics Lab report and Dalhousie professor, said, "These companies are huge and totally diversified from a retail perspective, so we recommend separating food sales from other sales."

The report found that Loblaw Companies Ltd was particularly notable, as it not only exceeded its five-year average performance but also outperformed any of those individual years. The research found that the total profits of the grocery chain in the first half of 2022 exceeded its best previous results by $180 million – equivalent to about an additional million dollars per day. For comparison, Metro Inc’s recent total profit was $11 million less than its best performance over the past five years, while Empire Co. Ltd, the parent company of Sobeys Inc, saw a decline of $37 million in the first half of the year compared to its best results, the report said.

However, the report’s authors said the lack of more detailed financial data makes it difficult to interpret why the three supermarket companies exceeded their average performance this year. Also, Samantha Taylor, accounting instructor at the Rowe School of Business at Dalhousie and co-author of the report, said, "We wanted to see whether grocery sellers are taking advantage of high inflation times to overcharge for food. But it is inconclusive, as we don’t have that data." Under International Financial Reporting Standards, publicly traded companies can aggregate operating segments with similar characteristics. For example, Loblaw’s retail segment includes sales from grocery stores and pharmacies, including the Shoppers Drug Mart chain and other sales of health, beauty, and general merchandise. Therefore, it is unclear whether the sales growth is due to food or other items such as children’s clothing or makeup. Charlebois said the report’s findings underscore the need for more transparency in the Canadian grocery sector. Taylor also stated it is quite likely that consumers are spending more money on products with higher profit margins like cosmetics and clothing.

This report comes as food price inflation continues to rise in Canada. Grocery prices jumped 11.4 percent in September compared to the previous year, the largest increase since 1981, according to Statistics Canada. The rising food prices also prompted the Canadian Competition Bureau to launch a study on competition in the grocery industry. However, grocers defended their profits, saying their margins have not changed. Catherine Thomas, Vice President of Loblaw, added that retail is: "the face of inflation, but we are not the cause. Inflation is a global issue, not a uniquely Canadian one, and the price available to us represents many costs and many companies in the supply chain. This is another study investigating food prices without even taking one step forward into the chain, including the major price increases from global manufacturers."

Additionally, Mary-Claude Bécogne, Vice President of Public Affairs and Communications at Montreal-based Metro, said grocery profit margins have remained stable for many years, stating, "Despite misleading claims by some, we work hard every day to provide value to our customers and help them in the current global inflation context."