Canada’s three big grocery chains have come under fire for a multi-year bread price-fixing scandal and the end of ‘hero pay’ bonuses for frontline workers during the pandemic
Grocery chain Metro Inc. said on Tuesday it was keeping food prices stable as usual this holiday season, a day after one of its biggest rivals launched a campaign to freeze prices for fight against inflation.
The Montreal-based company said it would not accept cost increases from its suppliers during its busiest time of the year “in order to avoid any changes in retail prices, at rare exceptions”.
“It’s a long-standing practice at Metro,” said the grocer’s vice-president of public affairs and communications, Marie-Claude Bacon, in an email. “This keeps retail prices stable for our customers in our stores.”
Metro’s comments come a day after Loblaw Companies Ltd. announced that it would freeze the prices of all its no-name house products until January 31, 2023.
Metro’s price suspension applies to both private label and national brand products and runs from Nov. 1 to Feb. 5, Bacon said.
His comments appear to slightly deviate from a statement Metro provided to CBC News on Monday, which suggested it was “industry practice” to freeze prices during the holidays.
“It gave the impression that the retailers were colluding to fix the price of the food products they buy from the suppliers, which is illegal,” said Simon Somogyi, professor at the University of Guelph and holder of the chair. Arrell on Food Trade. “There seems to be an anti-competition problem.”
In recent years, Canada’s three big grocery chains have come under fire for a multi-year bread price-fixing scandal and the simultaneous end of “hero pay” bonuses for frontline workers during the pandemic.
When asked if refusing supplier cost increases during the holidays was an industry practice, Bacon said she could “only speak for Metro.”
Still, Metro’s initial suggestion that it’s not unprecedented for a grocer to hold prices steady over the holidays raised questions about whether Loblaw’s price freeze was more of a public relations move than a genuine effort to help Canadians during a period of spiraling food inflation.
Loblaw’s vice president of communications, Catherine Thomas, said Tuesday “it’s common for some vendors to keep costs down during the busy holiday season.”
“In summary: it is not common to commit to maintaining prices at all times of the year, in particular for 1,500 (unnamed) items covering fresh, frozen, dairy and packaged products, whose price is already 25% lower on average than comparable products.”
Sobeys’ parent company, Empire Co. Ltd. Inc., which, along with Loblaw and Metro, is one of Canada’s three largest grocers, did not immediately respond to a request for comment on its plans to hold prices steady over the holidays.
The comments from Loblaw and Metro follow similar moves by grocers in other countries.
In August, French supermarket chain Carrefour announced plans to freeze the prices of around 100 of its private label products until November 30.
In June, the US arm of German grocer Lidl launched a summer price-cutting campaign to ease the inflationary burden on customers.
“If Loblaws was really concerned about increasing consumer spending on groceries, why didn’t it do so earlier this year when those double-digit price increases really started showing up in grocery stores?” , said Stuart Smyth, associate professor in the Department of Agricultural and Resource Economics at the University of Saskatchewan in Saskatoon.
He added that making the announcement just after the lucrative Thanksgiving season “reeks of hypocrisy.”
“When they’ve already reaped all the profits from Thanksgiving, you wonder how legitimately worried they are,” Smyth said.
Still, he said the price freeze is a ‘good move’ and they shouldn’t be chastised for making an effort.
“If the food retail industry hadn’t been busted for price-fixing bread, it would be a lot easier to digest this as a gesture of goodwill.”
This report from The Canadian Press was first published on October 18, 2022.
Brett Bundale, The Canadian Press
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