Experts Say Walmart, Costco in Canada Not Responsible for Making Food Inflation Worse
Experts have shared that Walmart and Costco are not responsible for making food inflation worse in Canada. The news seemingly backs the company CEOs who have been claiming that their company is not trying to profit from food inflation.
Ambarish Chandra, a University of Toronto economist called the issue performative and said all retailers try to maximize profits despite stating that they are trying to minimize price hikes. “It’s not as though American grocers are taking advantage of Canadians and Canadian grocers aren’t. The grocers are going to charge what they can get away with, what the market will bear,” he explained.
He also stated that one way of fighting these high grocery prices is increasing competition. “We should look into encouraging competition, and one way to do that is to actually have more foreign grocers in the country. So, the presence of Walmart is actually good for Canada in the long run, not bad for it,” Chandra said.
This comes amid parliamentary hearings and studies trying to determine the role of American retail giants such as Walmart and Costco in the rising grocery prices. In February, grocery prices were up 10.6 percent in Canada compared to last year, even though overall inflation was 5.2 percent.
CEOs of Canadian Walmart, Costco, Loblaws, and other large retailers have maintained that they are not trying to profit from food inflation.
Chandra did, however, point out the “bad behavior” that these companies seemingly employ. “We’ve seen, frankly, bad behavior from these grocers over the years, whether it’s price fixing or other sorts of scandalous issues, like co-ordinating on reducing pay for cashiers during the pandemic — all of these things stemmed from the fact that we just don’t have enough competition,” he shared.
He also added that the discussions are from the perspective of the consumer and that he hoped for deeper discussion into how supplier prices are set.