Think Globally, Shop Locally
The Saturday Huddle is a weekly column that features opinion, analysis, and reflections on Huddle stories, podcasts, and business news in the region. Mark Leger is the Director of News Content for Acadia Broadcasting and Huddle.
I was the primary shopper and cook when I was home full-time with the kids. I learned two important lessons during that period. One, I could purée broccoli and cauliflower, add it to spaghetti sauce, and Jack and Ella wouldn’t notice. Two, the best prices for meat, fish, and produce were at the small corner grocers, not at large chains like Sobeys and Superstore.
When the kids were with a babysitter or my mother, I would drive around to the various stores, large and small, and shop for the freshest food at the best prices. Most bulk items, of course, came from larger ones like Superstore, Costco, or Bulk Barn. In time, though, I was buying most of our meat, fish, and produce from smaller places like the Saint John City Market or a place called Olsen’s on the city’s west side. Overall, the prices were better.
This came as a surprise to me and everyone I told who mostly did one-stop shopping at larger stores. Many people assume large-scale businesses can offer better prices because of their wholesale purchasing power. This wasn’t my experience and it changed my shopping behaviour significantly.
People are generally cost-conscious shoppers always on the lookout for the best value, but it’s become even more critical over the last year with rapidly rising grocery costs and wage increases that aren’t keeping pace with inflation.
In September, the Consumer Price Index (CPI) was 6.9 percent, a small drop from 7 percent in August due mostly to falling gas prices. Food prices grew by 11.4 percent, the fastest pace year-over-year since 1981. On a year-over-year basis, prices were up for meat (7.6 percent), dairy products (9.7 percent), bakery products (14.8 percent), and fresh vegetables (11.8 percent).
In the same report, Statistics Canada said average hourly wages had risen 5.2 percent year over year and were not keeping pace with inflation. In fact, the gap had widened since August when the year-over-year growth in wages was 5.4 percent.
People are unhappy, to say the least, and looking for someone to blame. Many economists, governments, and company executives cite global issues beyond the control of the large grocers – supply chain problems since the onset of the Covid-19 pandemic, and the Russian invasion of Ukraine.
But there are others who quite rightly point out the profits being recorded by these companies, even as they’re facing issues beyond their control. All three major Canadian companies (Loblaw, Metro, and Empire) were more profitable this year than they were in the previous five years, according to a report by the Agri-Food Analytics Lab at Dalhousie University.
Michael Medline, the president and CEO of Empire, reacted angrily to accusations of “greedflation” at the annual general meeting for the Nova Scotia-based owner of the Sobeys stores.
Huddle’s Trevor Nichols wrote a story after listening in on Empire’s AGM. At the meeting, Medline insisted Empire’s success was the “direct result of a great strategy, disciplined execution, and the hard work and dedication of our teammates across the country.”
“I refuse to apologize for our success. Such success is not because of inflation, but in spite of it,” he said.
Related: Sobeys Boss On Rising Profits: ‘I Refuse To Apologize For Our Success’
The Dalhousie agri-food lab itself said it’s hard to prove that grocery companies are taking advantage of the inflationary environment to make even more money.
“Finding actual evidence of profiteering is challenging, based on the available data,” its report reads. “Accusing the industry of colluding or profiteering is easy. The conversation on ‘greedflation’ becomes more interesting when we ask ourselves how much is too much where profits are concerned.”
At least one grocery chain is responding to public concerns and criticism. Loblaw recently announced a temporary price freeze on its 1,500 “No Name” food and household products.
The federal Competition Bureau also recently launched a study on competition in the grocery industry in response to growing consumer concerns about the rising cost of food.
So, there is some recognition, on the part of the grocery industry and the federal government, that there is a problem Canadians want to be resolved.
I think the Dal food lab touched on a central question in its report: how much is too much where profits are concerned?
That’s a subjective question that doesn’t have a true answer. We want our large national companies to be successful: to grow and employ more people, and yes, be profitable. Medline was quite right to say the company should not apologize for its success.
But another equally important question: how sensitively are food companies handling their customers’ concerns?
In speaking to one group of his stakeholders, the company shareholders, Medline naturally highlighted and defended the company’s financial success.
But his defensive reaction about the company’s responsibility for price increases was insensitive toward another key stakeholder, his customer base that’s having trouble paying their rising grocery bills when their income isn’t going up at the same rate. That stakeholder group could include his employees too, who lost the “hero pay” that would have helped them pay for the rising costs of things like food, gas, and rent.
As I was thinking through this issue, I realized my habits had changed over the years since I went back to work outside the home and stopped shopping as regularly at those smaller stores. I decided to visit Olsen’s one evening and do some price comparisons with Sobeys.
The prices were now similar, but I realized I should shop there more regularly again anyway. It’s a whole lot easier to get in and out of a 1,500-square-foot store when you’re just looking for a few items for supper. It also has that friendly neighbourhood feel with handmade posters of sale items in the window and one with hand-drawn hearts that reads, “To Our Friends In Ukraine, Our Prayers Are With You.”
Think globally, shop locally, you might say.
Now, if I could only get my kids to start eating cauliflower again. The price is good right now.