As the grocery store scanners beep in a symphony, Loblaws and Metro, two of Canada’s largest grocery corporations, are seeing dollar signs dance. Both corporations are reporting record-high profits (up 11% and 32% in revenue respectively compared to the same quarter in 2022 ).
In a press release on Nov. 15, Loblaws shared how it’s had another quarter of “strong operational and financial results,” while simultaneously declaring that they are dedicated to fighting inflation and bringing down prices. Metro’s statement on Nov. 15 included a quote from their president saying that they are “pleased” with the results despite a “5-week strike.” Understandably, these corporations have boards and shareholders to appease, but the statements and the timing of the HungerCount Report make the organizations appear insensitive to the plight of their customers. Additionally, it’s not made clear how they are bringing down prices.
Corporations cite various reasons why the cost of groceries has continued to grow, and even outpace inflation; including diverting the responsibility to the food suppliers. In the same earnings press release, Loblaws directly stated it was their supplier’s fault that the costs were so high, and several media outlets, such as the Financial Post picked this up.
Food production corporations do have some responsibility for the price increases; however, some are attempting to avoid changing their prices by shrinking the product amount. This has led to the term, shrinkflation. Journalists have played an important role in bringing awareness to the public about this issue, with many news stories addressing this topic, especially from the consumer’s perspective.
In instances where a spokesperson is quoted, some corporations are taking the approach of ‘we are not doing anything wrong’ as they are abiding by the labelling laws indicating the product amount. This was noted in recent BBC and CBC articles. Unsurprisingly, consumers are feeling tricked, with one CBC story quoting Ellyn Newall of Edmonton:
Betty Crocker SuperMoist Cake Mix has decreased 13 per cent. Source: Left image was taken by Amanda Lamberti and the right image is from the Betty Crocker Super Moist Chocolate Fudge cake mix webpage.
There are limited examples of those on the production side embracing transparency about the change in quantity. Ben & Jerry’s released a statement updating their consumers on the rationale behind the decrease in tub size from 500ml to 473ml. However, there is no mention of the additional consequence for the consumer, namely that sales tax (GST) in Canada applies to snack products that are considered “single serving” (contains less than 500ml or grams), which their product now falls under.
Carrefour, a grocery store chain located throughout the world, has started posting notices identifying products that have changed the amount. This notice attracted international attention and appeared in several media stories, including BBC and Reuters. Interestingly, the company has not addressed this initiative on their social media channels (Twitter and LinkedIn) or website (as of Nov. 11, 2023.).
Corporations would be well advised to embrace this type of transparency as it tends to increase customer understanding and loyalty.
