The top executive at Sobeys asserted on Monday that Canada has one of the most competitive grocery retail sectors on the planet 鈥� even as Canadians continue to feel the bite of higher prices.
鈥淎lthough our country鈥檚 food inflation has been among the lowest in the world, and Canada is among the most competitive nations on Earth when it comes to grocery retail, this provides little comfort to Canadians who are struggling,鈥� Michael Medline told MPs on the House of Commons agriculture committee.
Medline is the CEO of Empire Company Ltd., which owns Sobeys and other grocery store chains.
His appearance came after the committee requested that the top execs of major grocers testify before the committee once again on their plans to stabilize prices.
Industry Minister Fran莽ois-Philippe Champagne announced this fall that Canada鈥檚 major grocers 鈥� Loblaw, Metro, Empire, Walmart and Costco 鈥� had shared plans to tackle rising prices that included discounts, price freezes and price-matching campaigns.
However, questions swirled about what exactly the grocers promised, given the details of the plans were not being shared publicly.
Now, Sobeys has outlined some of the initial steps it has taken.
The company says it historically freezes prices on 90 per cent of packaged products between November and January, and now, it has expanded that freeze to all such products.
鈥淲e also have meaningful plans and development to help stabilize food prices past January, but will not discuss these publicly as they remained commercially and competitively sensitive until launched in our stores,鈥� Medline told MPs.
The rapid run-up in grocery prices following the COVID-19 pandemic has led to the heightened scrutiny of Canadian grocers, particularly as some of them have reaped high profits.
And while food inflation 鈥� a global post-pandemic phenomenon 鈥� slowed in recent months, prices continue to rise rapidly.
In October, grocery prices were up 5.4 per cent compared to a year ago. Meanwhile, Canada鈥檚 overall inflation rate was 3.1 per cent.
The phenomenon has raised questions about whether the industry is competitive enough. It even prompted the Liberal government to propose changes to the country鈥檚 competition law.
The NDP has been pushing the Liberals to strengthen the Competition Act even further, arguing that changes can be made that would help bring down food prices.
However, Medline maintained during his testimony that the grocery industry is very competitive, and he doesn鈥檛 see many barriers to entry.
鈥淚 don鈥檛 think there have been huge barriers to competition (in) this country, but I鈥檓 sure that the government will put in place in the Competition Act even even greater ways where we can compete, and we welcome all that,鈥� he said.
In June, the country鈥檚 competition watchdog published a report saying Canada鈥檚 grocery sector needs more competition to help keep food prices down, give shoppers more choice and encourage new entrants.
Medline expressed frustration that Sobeys is grouped in with other grocers when it comes to the scrutiny of high profits during a time of elevated inflation.
鈥淚 get a little impatient that we鈥檙e jumbled up with the entire industry all the time. Every company is different,鈥� Medline said, adding that his company has lower profit margins than its competitors and made less money last year than the year before.
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