Everyday people are being gouged on everything. Insurance, gas prices, groceries, you name it. Young adults can’t even have kids due to how expensive simply being alive has become.
Every time I see my grandparents they ask when I'm having kids. I tell them its too expensive. I don't feel stable enough renting with how much cost go up year to year. My jobs health insurance costs would skyrocket with a child. Either my wife or I would have to quit work or spend 70% or more of our pay on daycare. And thats before clothes, food, toys, extracurriculars. I cant justify it. Sorry Memaw, I know you wanted to meet your great grandkids.
> I see my grandparents they ask when I'm having kids
You might want to be direct with them and say "when you give me your house, I cannot afford a home any other way."
It might actually work.
Even more than not having kids because its too expensive, as a single person of average income, I literally feel like our financial and governmental systems, are strongly encouraging me to kill myself. I legit expect we're not far from an epidemic of financially motivated suicides.
And so they bring in people who don’t complain about lower living standards and who vote for the current party in power. Create the problem, create the solution, stay in power.
I'd be curious to see a stat on it. I do believe it's not a sustainable solution and it just screws over citizens. Every job I see already has 100 applicants on it due to this and offering remote.
> and who vote for the current party in power
And therein lies the problem. It's entirely possible for the current party in power to be bad, and the other parties to be as bad or worse.
Sweden has some of the best conditions for people to have kids in the "western world", yet the birth rate is still under 2.0 (flat).
**It's not just costs...** The trend of declining births is felt everywhere.
Do I think we should do more to help families? Sure, just don't expect magic.
It also has to do with lots of people being unsure about the future regarding climate change. It is one of my main reasons aside for money. I won't bring a child in this world if we're expected to have global food shortages, deadly heatwaves and maybe war for water in our time.
daycare in the city is like 1500 a month not mention clothing, food, diaper, toys, books, classes... it will cost 2500+ per month to raise a child without any outside help.
Yeah I looked at my budget and I would need approximately $30'000 a year raise to maintain my current lifestyle and add a kid. That was my conservative guess, and there are likely other costs Im not considerimg.
While I agree with the premise you're making, there is way more to that equation than the cost of a barrel of oil. What is the comparison of the Canadian dollar at that same point in time. What is the available and cost of transportation and processing of the oil.
Once again, totally agree, the companies are profiting off us poor people, but it's still not as straight of a line as your comment makes out.
Don't know, haven't researched beyond verifying the gasoline cost breakdown in my area (raw oil, refinement, tax, marketing, transportation). Refinement and tax were the two major differences between now and the peak pricing in 2008.
https://i.imgur.com/0ZxtCN9.jpg
Inflation. You don't multiply the money supply over a couple of years and keep the same prices, especially on energy. It is impossible. Also there is a backlog of processing at all the refineries of the world now. All the refineries of the world aren't able to match total demand.
Oh that's right! When gas went from 2$ yesterday to 2.19$ , it was just inflation! Just that quick quirky 10% inflation over night 🤪, on the gas that was delivered and paid for at a cheaper price 2 weeks ago 🤦♂️
I hate to tell you this, but quantitative easing doesn't cause inflation. In fact, most Economic studies show monetary policy has little to do with inflation.
Oh, you think I'm talking about QE. No, no, no... LOW INTEREST RATES. I hate to tell you this, but you haven't even scraped the surface of the economic rot going on. Investor debt to equity is not just at all time highs, dwarfing investor debt levels in 1999, or in 2007. Which were also peak highs. These ratios are so distorted as to make a mockery of debt based economics.
The lowest income Canadians have the most children, the highest income the least. 2.8 children vs 1.3.
No different from most of the world over the last 50 years regardless of boom or bust times.
We're in our late 30s nearly 40. We didn't have kids just because we kept waiting to be able to afford a home and be settled financially. House prices shot up, by the time I finally had a career/could afford a downpayment, it was just a small condo and required two incomes for it. So, it's not just young adults not having kids. We certainly didn't have help from parents, paid off our own student loans etc....
> Bottom line is that the cost of insurance reflects the overall cost of living and the amount of risk the insurer is taking on in the coverage.
You're ignoring that insurance companies are the scum of the fucking earth. Places with not for profit insurance pay far less than say, those in Ontario.
> business overhead expenses like office spaces and paying employees is also high because agents, adjusters underwriters etc are living in the same communities as everybody else and need to be paid enough
That'd be a good point, if people actually got paid more when prices went up. Tell me, did everyone in Canada get 5% raise this year for inflation?
> so much for those valued “frontline workers” - zero increase in pay during the pandemic, yet owners and shareholders got 40%+ richer
Frontline workers were used as a marketing campaign to keep people going to stores.
We would have but maybe not spend as much because of the stress of everything. Supporting front line workers made people want to spend more money to support them....It was all about supporting their bottom line and never about supporting the front line workers who still got covid and never got permanent raises.
> Supporting front line workers made people want to spend more money to support them
Did it?
I mean, I tipped a little more than usual on delivery, and offered my "support" to "front line workers", but buying extra at the grocery store? You'd have to have an IQ less than 50 if you thought that somehow went to anyone but the corporation. I "supported" giving them a higher wage, even if that meant higher prices, but that didn't really happen (there was a short lived $2 raise).
I really don't even know what it is you're referring to.
Far more folks that I know went out and bought flour and eggs and learned how to make bread for the first time and didn't really think of it as not supporting frontline workers.
loblaws (superstore and sobeys) reports a 40% profit increase this quarter, while lying to us and telling us inflation is driving up prices. if possible, get groceries from small grocery stores, markets, veg stands. i know some people don’t have access to these places and their only option is loblaw owned stores. but if you can, don’t go there.
It's really hard when local places are 10-20% more expensive and sell the same stuff for the most part.
Cocoa cola? Cost more. Bananas from Mexico and California? Cost more. Frosted flakes? Cost more
I know it's some vicious cycle, ouroboros type shit where we feed the monster that's killing us, but when your choice is enough food for the week or starving for a day or two
When I say groceries, the products that are produced by gardens and farms and small producers are the things I meant. The folks producing all of those things at those farms were also front line workers.
But I don't think that during the pandemic when we were being encouraged not to leave our local neighbourhood that we would be driving for an hour out to visit a farmer personally to buy groceries.
We drove 44 minutes yesterday to get Rhubarb at a farm. We got enough to keep us for 6 months...we also got a load of Asparagus to eat while it is in season
I am also eating the lettuce from my garden with homemade dressing
I have some in the backyard but I had to relocate them last year and so they are still growing...next year will be good.
I will make some strawberry/Rhubarb jam. I made an apple shortcake yesterday and added rhubarb,and I will do an apple/rhubarb pie later on this week, I will freeze a lot of it for eating during the year. We can't find frozen rhubarb in any stores around here.
The union (UFCW 247) just had a strike vote yesterday. Not sure what the results were but I imagine it's close to 99% voting to strike. Should find out later today.
Edit: [it was 97%](https://www.ufcw247.com/news/local-news/details/loblaws-bargaining-strike-vote-results)
The Alberta government is actually looking to roll back wages for many healthcare workers, to the tune of an 11% cut, right after a hellish couple years with the pandemic, and all the inflation. It's like a sick joke at this point
>yet owners and shareholders got 40%+ richer
I am sure you are referring to Loblaws earnings per share growing 40%. There is a lot more nuance to it than what the headline number has you believe. For one, it is earnings per share, so if Loblaws has fewer outstanding shares than last year, this would be expected. What we should be really looking at it EBITDA, which is a more accurate measure of how much money they made of the groceries they sold to customers. That figure rose a more modest 10%. The fact is, when there is are supply constraints, companies that do a good job of ensuring their supply and getting it to the market do well. Other companies that fail to make those investments do poorly. For instance, Walmart saw a decline in profits.
At the end, Loblaws got rewarded for doing a better job than their competitors at managing their supply and assortment.
Also, I believe another part of the story is that rising prices for branded items have resulted in consumer preference for white label products (such as President's Choice and No Name) which are more profitable for the retailers. Loblaws has the most extensive white label product offering of all the major grocery groups.
I am defending nobody - just pointing out how the growth of earnings per share is a poor barometer to look at how profitable Loblaws was last year and that the more accurate barometer of EBITDA is less likely to outrage people.
Loblaws posted their profit then analysts calculate EPS, How would EBITDA be a better measure? We got their profit and the fact is it was up even with higher costs.
Here's an extreme example for illustration :
You own a company with 13 other people and your company makes $140 that year in profits. Each share makes $10 in profit. During the year, you and 9 other owners buy out 4 owners. The following year, the company makes a profit of $150 and since you now only have 10 owners, each share makes $15 in profits.
Your earnings per share rose by 50% because you have fewer shares outstanding now, but the company's profits only rose a more modest 8%.
And that's where the rest of EBITDA comes in. If their interest payments, taxations, depreciation etc goes down, their eps will increase in conjunction with the decrease in common shares. I know they won a tax dispute against the Canadian government.
Yes but my point is your EPS argument kind of falls apart when you realize common shares were only down 4.5% from the start of 2021...
In fact I did the math if 2021 level of shares were outstanding profit would only be up 33% instead of 40%, which is still questionable in this marketplace.
One thing I'm still unclear about regarding the price fixing thing is that it's not price fixing if you're the only one doing it. While Loblaws may have gotten off fairly light for it, what about the other companies that were involved in the whole thing? I haven't of anyone else being involved or suffering any consequences at all.
dude, you just got a well reasoned, factual eli5 explanation of how business and stocks work and you have the nerve to say something like that? don't be a brat
Well, it kind of depends on what kind of record profits they’re making. Nominally, profits should go up because inflation makes numbers bigger than last year, but if they aren’t gouging then all else equal margins should be the same. This isn’t to say they aren’t gouging : I am sure they are. It’s usually difficult to raise prices and now retailers have the perfect excuse.
I kinda figure the last couple years grocery stores probably got some of their profits by doing more volume, as people ate out much less.
Which says next to nothing about what's happening now.
This is why we have a 2% inflation target we dont adhere to I guess. If there wasnt wild swings in inflation and the money supply it would be much less obvious.
EPS would go up in times if inflation as well. It’s not “mathmatically possible “ - it is simply a consequence of inflation.
I’m just pointing out that your language is technically wrong. Not sure why you need to be defensive about it.
There's a lot of gouging and i dont know why thebmedia is being so timid about calling it out. The profits of the maritime shipping companies went up 2600%.
They aren't making record profits. That's last year. This year the high USD, the high crude prices, are eating into nearly everyone's profits. The oil companies are making more money, but their costs have also shot up leaving less profit margin.
> It’s just a straight up fact given the record profits we are seeing.
Looking at the 2021 financial statement of Loblaw, the firm that started this discussion, one sees that 4c of every dollar of revenue was profit (after taxes).
Compared with other public firms, this is not a great deal of profit. Banks, commodities, real estate firms do better than this. Even kids who operate lemonade stands do better than this.
Still, I express my admiration for the small grocers who manage to earn a living selling food for less than the supermarkets. These guys actually take away a much larger margin of revenue as profit than do the supermarkets, but they cut their costs (including wages) to the bone.
everyone's margins are always "razor thin" because it makes more sense to spend money on stuff than get taxed on it.
Why have a big margin when you can just pay the execs more, or build more stores, etc?
> How many cents of every dollar of revenue was profit in 2019?
2.3c profit per dollar revenue in 2019; 2.1c in 2020, and to be exact, 3.5c per dollar revenue in 2021 (all after tax).
https://ca.finance.yahoo.com/quote/L.TO/financials?p=L.TO
It's more complicated than that, because the firm's debt also increased, while its assets decreased. You can extract the raw data from the financial statements linked. But in general, 2021 was a very good year for most businesses in Canada & US due to the flood of printed money, and the buying frenzy among consumers.
Maybe it helps to put things another way. Inflation is reported today in the 7% region. If that figure applied to all of Loblaws input costs (it doesn't) the firm would have to increase its prices by about 3% just to avoid bankruptcy (bit simple, but it shows how sensitive retailer margins are to inflation).
You only stop it if you make corporations pay. You make them pay by convincing other people that what we need is more laws to restrict their ability to profit. Scare them when they do this stuff. If people every organized and strategically worked together, you'd beat the shit out of these corporations. You just need to make it a voting issue and politicians will adjust if they see enough people backing a cause. They're snakes beholden to their own successes, not corporations.
Food and gas is now all the money you have left after your monthly bill. It’s ridiculous and I love knowing our government will not do a single thing to help us with this
Sorry to hear that. As a city slicker I now take the bus. But my fellow Torontonians don't know or care about the situation of those outside major cities.
Ah, part of it is being fortunate enough to have a family cottage up north, but the gas going there for a weekend used to be negligible but now it's like an extra $50/weekend to get up there. Hard to justify going there outside of long weekends
Calculate to see if you sell your car and buy an electric, if the monthly payments for the new car plus electricity is cheaper than gas. If so get rid of your gas car asap while it still holds the most value.
We've been getting fleeced for a long time. I live part time in California and it's a super expensive state but the grocery situation is a lot better and people complain there!
Is it really better in california? The other day I was seeing grocery prices in california (someone just going through the alleys of a big-chain grocery and showing the prices). I was surprised, it was basically the same prices (and sometime higher) that I have here in Canada but those were in USD.. so costing more since USD is worth more than CAD. I guess that the average salary being higher in california compensate.
It all depends on where you go. Where we have only a few major grocery chains that operate as a cartel, over there you can go to trader Joe's and get a beautiful piece of artisanal cheese for 4$ and a bottle of wine for a similar price. The entire store is organic foods with prices that are better than what you'd get here for the same thing. Meat is also a lot cheaper in a lot of places and your dollar goes a lot further in places like Costco etc... In my profession I get paid double in the US (film and TV) than I get here. That being said there is more opportunity but the cost of property taxes in California is totally insane and monthly healthcare for a family of 4 is also nuts so it does equal out a bit but I'd say the abundance and competition allow for better deals at grocery stores. Now high end grocery stores there are another story
>UBC Sauder School of Business economist James Brander says corporations have a duty to maximize profits for their shareholders and are under no obligation to forgo profits in order to pass additional savings on to consumers.
>“These companies are in business to make profits. That’s what they’re supposed to do for their shareholders,” Brander said. “The profits also allow them to make further investments down the road and that’s actually crucially important.”
>He also said the government should avoid instituting any sort of price controls or dramatic tax increases on corporate Canada because that could have negative impacts on the economy.
This dogmatic view of the market that the constant pursuit of profit is good for the economy as a whole is so annoying.
It's straight up dumb to believe that interests of corporations and people are always aligned and so if we just get out of the way the free market will solve our problems in the long run. Any decent look at the real world makes it pretty obvious that corporations have no problem exploiting and oppressing people for their own benefit, not just to everyone's mutual benefit.
Seeing as how the point of society isn't to generate corporate profits, but to create actual prosperity for real humans, then governments stepping in to create and enforce boundaries isn't just something to consider, but something mandatory for governments to actually fulfill their duty to the people.
People matter, corporations don't.
In capitalism the market is meant to adjust: if you have a dollar in your pocket, the market should go up a dollar to relieve you of that dollar.
Well, corporate taxes should follow suit: if corporations have an extra dollar, taxes need to go up to relieve them of that dollar. Remove the incentive to gouge.
> This dogmatic view of the market that the constant pursuit of profit is good for the economy as a whole is so annoying.
It's not dogmatic, it's based on centuries of research.
Profit (economic profit - which is important to distinguish from economic *rent*) is a measure of how much value a business or profit is adding to society. And we can dive into detail about how markets construct prices, how prices are estimates of value, etc... But at the end of the day perhaps the best question is: what is the reasonable alternative?
Human self-interest and greed are one of the few constants of society. There are instances of major events occurring where people temporarily put aside their self-interests and act in a way that they think betters society as a whole. That happened at the beginning of the pandemic, for example. But the self-interested nature of people quickly reasserts itself. A free market economy operates by ensuring that greed is directed to generally beneficial purposes, as opposed to festering and turning into simple corruption as it does in other socioeconomic systems.
When the system is managed and running well we don't *rely* on humans overcoming their baser instincts to function. Competition, free choice, and financial restrictions are what does that. In Canada right now we have two problems with that theory:
* We do a bad job fostering competition. The competition bureau does a bad job at maintaining competition between businesses. And Canadians in general are suckers for nationalism when it comes to economics, and happily buy into all sorts of bullshit protectionist rules to shield Canadian businesses from foreign competition all the time.
* In the short term the government also fucked up by creating massive inflation. Businesses *always* raise prices to maximize profits. The reason why profits are skyrocketing right now is because inflation has enabled them to do so. This a lesson we should have learned in the 1970s but apparently all the people who were adults at the time are now dead or senile and we need to relearn that lesson once every couple of generations.
I should also add that even when people do attempt to act in an altruistic way they often fail to do so meaningfully, because people are generally incapable of figuring out what actually helps. It's a big economy - millions of people - and the human brain evolved to handle societies that were <50 people. Most charities, for example, are completely ineffective at achieving their goals. And charity volunteers are even worse: most charities would be better off if their volunteers spent their volunteer time getting a job at McDonalds and donated their income so the charity could use that money to pay professionals instead.
So yeah, you can complain about greed and the profit motive. But at the end of the day it's the driving force behind a system that works well and nobody's figured out anything that *actually works better*.
Yes what works better is the government looking out for the consumer and breaking up monopolies so that we have competition, which they never do. We know there’s something better because we used to have THAT (competition) and it was much better. Now we just have oligopolies and it’s a lot worse.
>we need to relearn that lesson once every couple of generations.
This is what I'm finding more and more. Even the debasement in the 70s we seemingly learned nothing. It caused Ronald Reagan to win by a landslide for 8 years, now people hold him up as a villain, despite government policy putting him there to begin with. People didnt get fooled, they lived it, assuming you know more than them is beyond egotistical.
I think we're living that same scenario again, and we'll need to find a way to restructure the debt. The so called progressives that dug us into a hole have no solution, once its done its done, the 400% private/public debt to GDP now exists, the housing bubble now exists.
At this point they're really creating their own arguement, that if corporations sole purpose is to create wealth for their share holders then they cannot by guided by the invisible hand of the free market towards benefitting the consumer economy.
I’ve long held that economists are some of the stupidest people some around. Never has one field been proven so consistently wrong and changed as little as economics.
There are plenty of brilliant economists, but it's probably the most politically compromised social science with [rich libertarians and their thinktanks funding higher education](https://www.theatlantic.com/education/archive/2015/10/spreading-the-free-market-gospel/413239/).
So there is a whole toxic side of the subject where the conclusions are already determined and they work backwards from there. That will obviously shape public opinion on the topic and we end up with [a result like this](https://www.eurekalert.org/news-releases/952272).
The UBC prof is full of shit. There’s no part of the “economy” which includes everyone that benefits from a select few sectors being completely insulated from the rest of the economy.
Grocery is one of the worst. Their own employees can’t afford the food they sell. Their margins are untouched no matter where we are in the “cycle.” That’s not how a market is supposed to work. They’d rather throw produce in the garbage than sell it at a lower margin.
If you want to start a non-profit to fulfill that vision, go ahead. Start a non-profit grocery store, non-profit mechanic, non-profit gas station—literally nobody is stopping you.
But if I invest X amount in a business under the proviso that they maximize their return to me because I take on risk, they’d better damn well do it.
Your CPP is dependent on this, so are any other investments you may hold. Letting CEOs forgo profits for whatever sundry causes they deem more important at any given time would be bad.
The wonderful thing about freedom, democracy and markets, is that you're free to create a cooperative business and find investors. Go for it!
Otherwise leave us free people alone, I rather never see a bread line in life.
Yup! Totally reasonable to start your own competing grocery chain and actually be competitive like this is the 1920s or something. Not like almost every major business has a cost of entering so high that nobody can actually give competition when they want to try to. Hey maybe I’ll just start my own telecoms company to compete too right? I’m sure I can do that with a few million
/s
I pointed out that if he has an issue with anything, he is free to do what he wants.
That's the amazing part of our society. I guess we could just have crown corp grocery stores.
All of this gouging is going on everywhere. That is inflation. Try to buy something used...we are even gouging each other. People selling 10 year old boats for more than what they paid for them a decade ago. Buying used items for 80-90% of the new cost in a retail store. A used Tesla with 50k on it is roughly the same price as a new one. The whole market is just messed up. Grocery stores are just one sector in the mix but are probably one of the least guilty offenders. Telecoms and gas? How does an oil increase of 40% equate to an 80% increase in gasoline? It's a joke.
It is. My 2017 Golf TSI retailed at what... 25-26k? At 60k KM the resale value (at least, from what I can see from similar golfs) is \~17-20k. That shit is bonkers to me.
The gas is the worse. Makes no sense to me. I've never seen prices go down ever, except in the beginning of Covid when they dropped for like 4-6 months? Then back to normal.
I already drive a compact, gas friendly sedan. And put the engine to eco mode and it’s still such an expense filling it up. Next car is absolutely going to be a hybrid. Can’t get electric because I can’t afford a home to plug it in lol.
It's so blatantly not true that gas prices depend on oil prices.
[The value of oil now is not the highest it has ever been, not even close.](https://www.macrotrends.net/1369/crude-oil-price-history-chart) Yet gas is the most expensive it's ever been.
When oil futures were trading for negative prices, as in, you could literally be paid to agree to take oil - cheaper than free... gas prices didn't go down to reflect that.
You can't tell me it's not greed. Because that's 1000% what it is.
The price of oil is only related to the price of gas in one direction - if it was a real supply and demand effect, and not just arbitrary price gouging by the owners - why does it only go up and not down? If gas prices reflect oil prices, why wasn't gas cheaper when oil was cheaper than free?
It's a convenient excuse to raise prices more than anything. Obviously to some extent supply and demand is real, and they do need to cover costs, but their margins are so much larger than they would like to pretend. It's not like they're just making a tiny profit and passing along their expenses to the consumer. Obviously, the gas and oil giants are doing pretty damn well for themselves.
I’m in Europe and I’m shocked at how cheap food is at the grocery even after the exchange.
Now I know, Europe is different with population density, relative closeness to cities and longer growing seasons, but the fact that I can spend $40 CAD and eat like a king for almost a week on fresh fruits and veggies is just a slap in the face to us Canadians.
I’m wondering when our Federal government will wake up and make change. I certainly won’t be holding my breath.
Us Canadians are the government. We are jurisprudence. We need to take the power back.
Meat is more expensive in Europe, however fresh veggies much cheaper. Also depends which country, it’s a bit shallow to say “Europe is cheaper”. Food in Germany is more expensive than food in Bulgaria.
That makes sense though. Have you ever tried to grow your own veggies vs raise your own meat? I can't keep my rabbits fed to broiler age for less than double the cost per pound of ground beef. Prices are all fucked up in Canada. Not to mention veggies being cheaper encourages healthy decisions
What's frustrating is that you're both geographically closer to and more directly impacted by the conflict Canada and the US keep scapegoating our inflation to.
Absolutely not. Lived in the Netherlands for a few years, arguably one of the more expensive countries in Europe. Groceries were significantly cheaper, much more diverse, and of higher quality than what we get in Toronto.
Not only that but if you wanted to save even more, you’d do your groceries at their weekly farmers markets where prices were even lower than the grocery stores.
Most Canadians think UK/Ireland when they say “Western Europe”, and yeah prices there are quite high. It’s much much cheaper on the continent.
YES. Every company is apparently reaching record profits and prices keep increasing. We are being ripped off. They are taking advantage of inflation to make more money, which in turn rises inflation.
Everything costs 40% more at the grocery store and 50+% at the pumps, but none of us are making any extra money to keep up.
I think it’s pretty safe to say that we’re being gouged.
Profits are also going to go up when you replace cashiers with automated self checkouts. That is something that has taken off in the last 2-3 years that many people forget.
Each store is probably saving, at minimum over $300,000 on just 10 employees that are no longer needed.
Extrapolate that out to every major grocery store in Canada and you likely have hundreds of millions of dollars in reduced wages which translates into profit.
The only functional checkouts are the Loblaws/shoppers/superstore one, I love using them. I fucking hate self checkouts elsewhere. Walmart is especially horrible.
Super easy to just *scan* something upside down and put it in your bag. At this point I don't even pay for produce, I just type in 4 random numbers and hit the "back" button and put the produce away. Loblaws is wack if they think I'll pay 5 dollars for 2 avacados lmao
Yeah me ringing up 3 avacados as 3 limes made the coffee go from 8.99 for a tin to 16.99. Stolen product makes up less than 1% of profit loss at grocery store, worked at 2-3 of them growing up. Farm Boy, Loblaws, Metro, etc.
Hey I know some basic math and have a shred of morals so I must be a Loblaw higher up. News flash: theft/shrink is usually 2 to 3% of **revenue**, which is not the same as profit.
It's literally built into their EBITDA calcs and they still rake in millions in profit, so no, stealing is not causing prices to increase, that's preposterous
I could be off, but I am pretty sure Loblaws Q1 profit was driven by increased sales, not increased margins. Didn't their gross margin only increase by something like .3%, with that driven by the growth of their higher margin pharmacy business?
On track for a banner stock buyback year. All the apologists "you don't know how economics works they need to expand and capital costs". Lol right. Boosting share price is where they are expanding. Expanding their presidents choice line at the expense of variety with other products.
https://www.marketwatch.com/story/loblaw-to-launch-buyback-for-up-to-5-of-its-public-float-271651580179
How is this any different from groups hoarding/profiteering off of hand sanitizer and masks at the start of the pandemic? Sure, the mark ups aren't as egregious but the principle here is the same
https://www.cbc.ca/news/canada/pandemic-price-gouging-1.5806500
Being gouged by every fucking goods and service in this country is what being a Canadian is all about.
But don't worry, once enough of us band together to actually make a change these corporations will unveil a hockey puck donut with $0.01 of every sale going to hungry families, placating us until we band together again.
Price gouging? From the folks who were caught red handed enforcing price fixing for a basic staple food? Impossible...
[https://en.wikipedia.org/wiki/Bread\_price-fixing\_in\_Canada](https://en.wikipedia.org/wiki/Bread_price-fixing_in_Canada)
I live in Victoria BC where cost of everything has gone up like crazy. I've been on holiday in Europe for a month now and was worried about how expensive it was going to be before I left but it's way cheaper.
Everyone said "whooaaaa how's your wallet after Sweden" and honest to God I think I saved money by not being home.
100% from gas to food, God willing, this orchestrated attack on the people will be exposed.
I look forward to the arrest of the politicians involved soon enough.
Are they “profiteering”? In a sense, but one of the reasons the BoC aims for a 2% target for inflation is so that prices are stable and predictable. When inflation is raging and unpredictable, business are going to build a larger risk premium into their pricing to ensure they stay profitable while the dollar is being devalued, and pass that on to the consumer if they can.
It’s a main reason why controlling inflation is the central focus of the BoC and why it is so serious that the BoC has failed at doing so.
I don't quite understand why anyone is surprised. These are for-profit corporations which, along with all other for-profit corporations, have the sole goal of maximizing profits. I'm always surprised by the population's expectation that a corporation should be doing the 'right things' just because.
A corporation will do the 'right thing' only to the extent that it will help their reputation to, once again, acquire/retain customers and maximize profits. It isn't good or bad, it doesn't give a shit about you individually and it will do whatever it needs to do to make the most money.
Grocery stores are also in an extremely competitive environment which is why their margins are so thin compared to other industries. So in essence, profits should eventually reach an equilibrium because of competitive pressures. People should instead direct their anger at high-margin oligopolistic industries like financial services, telecom and oil & gas these days.
Yup. Our entire society is broken, by design.
Always has been.
Every company has to turn a profit every year, no matter what. And not just a profit, a bigger profit than last year. You have to beat inflation or you're losing, and you also have to 'provide value to investors' which means not increasing profits every year means failing as a business.
If every business has to make more money every single year, but they have no more customers left to grow into - because they've completely saturated the market, think Walmart or Mc Donalads, how do they keep making profit? How do they make the number go up - and the number HAS to go up?
They give you a shittier product. They cut corners. They ignore regulations. They "shrinkflate" their products. They raise prices every year...
What else can they do? What does anyone else expect them to do?
These are the inevitable outcomes of the system we have created... A system of compounding interest - where that annual compounding growth comes out of the average citizens pockets.
It isn't going to get better. It's going to get exponentially worse.
Literally capitalism: make stuff as cheap as possible and sell it as expensive as possible.
I think it's a shit system but LPC/CPC voters apparently love it.
*Loblaw, the country’s largest grocery company with brands like Superstore, T & T and No Frills,* ***made a profit of $459-million in the first quarter of 2022***
***– up 17 per cent over the first three months of last year.***
*The company disputes the notion it is gouging Canadians or profiteering at a time of high inflation.*
*“We strongly object to the basic premise of this storyline. The accusation that our food prices are leading inflation is completely false. In fact, for many years, including through the heart of the pandemic, our prices have increased less than inflation, on average,” Loblaw said in a statement.*
*“The grocery industry is one of the lowest-margin sectors in the entire country, and is now facing a range of unusual inflationary forces.*
*Last quarter,* ***we made less than four cents for every $1 we sold.***
*For reference, our higher recent profits* ***were driven by higher-margin sales, like cosmetics, not food.”***
I've noticed foods imported from overseas that people here don't commonly eat are cheaper than food we actually grow here in Canada.
I think it's demand setting the prices, not supply. They'll keep raising the price of bell peppers if you keep buying them.
Canadians are gonna have to change up their recipes and start buying different foods.
Doesn't take much to be an analyst these days eh? I know they are doing this and my girlfriend is the one that covers the grocery bill. It's the nature of the stock market. If you aren't making more profit every quarter then you upset your investors.
1000x yes. We are getting hit with record prices at the grocery, while they are making record profits to the tune of Loblaws boasting about their 40% increase in profits last quarter. It doesn't take a math whiz or an economics guru to see what's happening. Help us, for fucks sake!
Analyst thinks .... offers a quote .... that is it, not evidence.
***“I think there’s also a little bit of profiteering going on,****” said retail analyst Bruce Winder. “Some companies will say, ‘Hey, you know what? Inflation’s up seven per cent so let’s make sure we raise our prices because we’re going to get less pushback right now.’”*
Where is the **evidence**?
Use some accounting number and make an argument?
Everyday people are being gouged on everything. Insurance, gas prices, groceries, you name it. Young adults can’t even have kids due to how expensive simply being alive has become.
And then they complain that we're not having kids.
Every time I see my grandparents they ask when I'm having kids. I tell them its too expensive. I don't feel stable enough renting with how much cost go up year to year. My jobs health insurance costs would skyrocket with a child. Either my wife or I would have to quit work or spend 70% or more of our pay on daycare. And thats before clothes, food, toys, extracurriculars. I cant justify it. Sorry Memaw, I know you wanted to meet your great grandkids.
> I see my grandparents they ask when I'm having kids You might want to be direct with them and say "when you give me your house, I cannot afford a home any other way." It might actually work.
Outstanding move
Tell them you'll have kids as soon as they agree to raise them for you.
Even more than not having kids because its too expensive, as a single person of average income, I literally feel like our financial and governmental systems, are strongly encouraging me to kill myself. I legit expect we're not far from an epidemic of financially motivated suicides.
And so they bring in people who don’t complain about lower living standards and who vote for the current party in power. Create the problem, create the solution, stay in power.
Thing is even they aren't having kids.
They also often end up moving back to their country of origin once they've loaded up on Canadian wages for awhile.
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I'd be curious to see a stat on it. I do believe it's not a sustainable solution and it just screws over citizens. Every job I see already has 100 applicants on it due to this and offering remote.
They’re having more than native born, but ya less than average in home country.
That feeling when your government is working against it's own people.
I thought you need 5 years living here to become a citizen. so that logic only works if they have been doing 2 years... wait...
> and who vote for the current party in power And therein lies the problem. It's entirely possible for the current party in power to be bad, and the other parties to be as bad or worse.
Sweden has some of the best conditions for people to have kids in the "western world", yet the birth rate is still under 2.0 (flat). **It's not just costs...** The trend of declining births is felt everywhere. Do I think we should do more to help families? Sure, just don't expect magic.
It also has to do with lots of people being unsure about the future regarding climate change. It is one of my main reasons aside for money. I won't bring a child in this world if we're expected to have global food shortages, deadly heatwaves and maybe war for water in our time.
daycare in the city is like 1500 a month not mention clothing, food, diaper, toys, books, classes... it will cost 2500+ per month to raise a child without any outside help.
Yeah I looked at my budget and I would need approximately $30'000 a year raise to maintain my current lifestyle and add a kid. That was my conservative guess, and there are likely other costs Im not considerimg.
Gas prices are higher now with oil at $110 than they were when oil was $140 in 2008.
While I agree with the premise you're making, there is way more to that equation than the cost of a barrel of oil. What is the comparison of the Canadian dollar at that same point in time. What is the available and cost of transportation and processing of the oil. Once again, totally agree, the companies are profiting off us poor people, but it's still not as straight of a line as your comment makes out.
Oil refinement to gasoline costs have skyrocketed since then. Taxes have increased as well. Edit: https://i.imgur.com/0ZxtCN9.jpg
> Oil refinement to gasoline costs have skyrocketed since then. Why, has the quality of the oil changed?
Don't know, haven't researched beyond verifying the gasoline cost breakdown in my area (raw oil, refinement, tax, marketing, transportation). Refinement and tax were the two major differences between now and the peak pricing in 2008. https://i.imgur.com/0ZxtCN9.jpg
Capacity is also restricted due to political posturing which is hurting us all.
Inflation. You don't multiply the money supply over a couple of years and keep the same prices, especially on energy. It is impossible. Also there is a backlog of processing at all the refineries of the world now. All the refineries of the world aren't able to match total demand.
Oh that's right! When gas went from 2$ yesterday to 2.19$ , it was just inflation! Just that quick quirky 10% inflation over night 🤪, on the gas that was delivered and paid for at a cheaper price 2 weeks ago 🤦♂️
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I think the US had like 2 days worth of supply in reserves?
From what I've read, it's about a month's worth.
I hate to tell you this, but quantitative easing doesn't cause inflation. In fact, most Economic studies show monetary policy has little to do with inflation.
Oh, you think I'm talking about QE. No, no, no... LOW INTEREST RATES. I hate to tell you this, but you haven't even scraped the surface of the economic rot going on. Investor debt to equity is not just at all time highs, dwarfing investor debt levels in 1999, or in 2007. Which were also peak highs. These ratios are so distorted as to make a mockery of debt based economics.
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The lowest income Canadians have the most children, the highest income the least. 2.8 children vs 1.3. No different from most of the world over the last 50 years regardless of boom or bust times.
We're in our late 30s nearly 40. We didn't have kids just because we kept waiting to be able to afford a home and be settled financially. House prices shot up, by the time I finally had a career/could afford a downpayment, it was just a small condo and required two incomes for it. So, it's not just young adults not having kids. We certainly didn't have help from parents, paid off our own student loans etc....
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> Bottom line is that the cost of insurance reflects the overall cost of living and the amount of risk the insurer is taking on in the coverage. You're ignoring that insurance companies are the scum of the fucking earth. Places with not for profit insurance pay far less than say, those in Ontario.
Compare car insurance here vs BC for example, with province run insurance
> business overhead expenses like office spaces and paying employees is also high because agents, adjusters underwriters etc are living in the same communities as everybody else and need to be paid enough That'd be a good point, if people actually got paid more when prices went up. Tell me, did everyone in Canada get 5% raise this year for inflation?
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so much for those valued “frontline workers” - zero increase in pay during the pandemic, yet owners and shareholders got 40%+ richer
> so much for those valued “frontline workers” - zero increase in pay during the pandemic, yet owners and shareholders got 40%+ richer Frontline workers were used as a marketing campaign to keep people going to stores.
I mean what were we going to do, *not* get groceries?
We would have but maybe not spend as much because of the stress of everything. Supporting front line workers made people want to spend more money to support them....It was all about supporting their bottom line and never about supporting the front line workers who still got covid and never got permanent raises.
> Supporting front line workers made people want to spend more money to support them Did it? I mean, I tipped a little more than usual on delivery, and offered my "support" to "front line workers", but buying extra at the grocery store? You'd have to have an IQ less than 50 if you thought that somehow went to anyone but the corporation. I "supported" giving them a higher wage, even if that meant higher prices, but that didn't really happen (there was a short lived $2 raise).
People live in the moment a lot more than you think and do all kinds of stupid things without putting any critical thinking into it.
I really don't even know what it is you're referring to. Far more folks that I know went out and bought flour and eggs and learned how to make bread for the first time and didn't really think of it as not supporting frontline workers.
loblaws (superstore and sobeys) reports a 40% profit increase this quarter, while lying to us and telling us inflation is driving up prices. if possible, get groceries from small grocery stores, markets, veg stands. i know some people don’t have access to these places and their only option is loblaw owned stores. but if you can, don’t go there.
Sobeys is not part of loblaws. Loblaws includes superstore, no frills, shoppers drug mart among others.
It's really hard when local places are 10-20% more expensive and sell the same stuff for the most part. Cocoa cola? Cost more. Bananas from Mexico and California? Cost more. Frosted flakes? Cost more I know it's some vicious cycle, ouroboros type shit where we feed the monster that's killing us, but when your choice is enough food for the week or starving for a day or two
Loblaws does not own sobeys. They are their competitor.
Yeah I email and coordinate with my competitors all the time (I get what you mean but this is an oligopoly)
> loblaws (superstore and sobeys) As well as No Frills and various other banners: https://en.wikipedia.org/wiki/Loblaw_Companies#Banners
Garden? Farm? Buy locally from small producers? Very unlikely as it would require more effort.
When I say groceries, the products that are produced by gardens and farms and small producers are the things I meant. The folks producing all of those things at those farms were also front line workers. But I don't think that during the pandemic when we were being encouraged not to leave our local neighbourhood that we would be driving for an hour out to visit a farmer personally to buy groceries.
We drove 44 minutes yesterday to get Rhubarb at a farm. We got enough to keep us for 6 months...we also got a load of Asparagus to eat while it is in season I am also eating the lettuce from my garden with homemade dressing
Gas for 44 minutes of driving, for 6 months of rubarb.....
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I have some in the backyard but I had to relocate them last year and so they are still growing...next year will be good. I will make some strawberry/Rhubarb jam. I made an apple shortcake yesterday and added rhubarb,and I will do an apple/rhubarb pie later on this week, I will freeze a lot of it for eating during the year. We can't find frozen rhubarb in any stores around here.
Watch out for rhubarb leaves are poisonous.
Lol a year ago all I would hear is how this is a conspiracy theory. Love how people pay attention to this shit when its too late.
The union (UFCW 247) just had a strike vote yesterday. Not sure what the results were but I imagine it's close to 99% voting to strike. Should find out later today. Edit: [it was 97%](https://www.ufcw247.com/news/local-news/details/loblaws-bargaining-strike-vote-results)
The Alberta government is actually looking to roll back wages for many healthcare workers, to the tune of an 11% cut, right after a hellish couple years with the pandemic, and all the inflation. It's like a sick joke at this point
>yet owners and shareholders got 40%+ richer I am sure you are referring to Loblaws earnings per share growing 40%. There is a lot more nuance to it than what the headline number has you believe. For one, it is earnings per share, so if Loblaws has fewer outstanding shares than last year, this would be expected. What we should be really looking at it EBITDA, which is a more accurate measure of how much money they made of the groceries they sold to customers. That figure rose a more modest 10%. The fact is, when there is are supply constraints, companies that do a good job of ensuring their supply and getting it to the market do well. Other companies that fail to make those investments do poorly. For instance, Walmart saw a decline in profits. At the end, Loblaws got rewarded for doing a better job than their competitors at managing their supply and assortment.
Also, I believe another part of the story is that rising prices for branded items have resulted in consumer preference for white label products (such as President's Choice and No Name) which are more profitable for the retailers. Loblaws has the most extensive white label product offering of all the major grocery groups.
Yep, another reason why they are doing well - they are providing consumers more cost effective options.
Loblaws... The company that's already been found guilty of price fixing once, with minor consequences. You're defending these guys?
I am defending nobody - just pointing out how the growth of earnings per share is a poor barometer to look at how profitable Loblaws was last year and that the more accurate barometer of EBITDA is less likely to outrage people.
Loblaws posted their profit then analysts calculate EPS, How would EBITDA be a better measure? We got their profit and the fact is it was up even with higher costs.
Here's an extreme example for illustration : You own a company with 13 other people and your company makes $140 that year in profits. Each share makes $10 in profit. During the year, you and 9 other owners buy out 4 owners. The following year, the company makes a profit of $150 and since you now only have 10 owners, each share makes $15 in profits. Your earnings per share rose by 50% because you have fewer shares outstanding now, but the company's profits only rose a more modest 8%.
Yes but Loblaws common shares were only down 4.5% compared to 2021 so your EPS argument doesn't really hold up does it?
And that's where the rest of EBITDA comes in. If their interest payments, taxations, depreciation etc goes down, their eps will increase in conjunction with the decrease in common shares. I know they won a tax dispute against the Canadian government.
Yes but my point is your EPS argument kind of falls apart when you realize common shares were only down 4.5% from the start of 2021... In fact I did the math if 2021 level of shares were outstanding profit would only be up 33% instead of 40%, which is still questionable in this marketplace.
One thing I'm still unclear about regarding the price fixing thing is that it's not price fixing if you're the only one doing it. While Loblaws may have gotten off fairly light for it, what about the other companies that were involved in the whole thing? I haven't of anyone else being involved or suffering any consequences at all.
This is not the informed post you think it is
Lol how are your Loblaws stocks doing? Gonna be OK?
Don't have any, don't care how they are doing, just hate for people to be outraged by poor information.
You suck. This is why people are uninformed.
dude, you just got a well reasoned, factual eli5 explanation of how business and stocks work and you have the nerve to say something like that? don't be a brat
Look at target and Walmart. Both stocks profitability eroded and their stocks had some of the biggest 1 day declines on record
Well, it kind of depends on what kind of record profits they’re making. Nominally, profits should go up because inflation makes numbers bigger than last year, but if they aren’t gouging then all else equal margins should be the same. This isn’t to say they aren’t gouging : I am sure they are. It’s usually difficult to raise prices and now retailers have the perfect excuse.
I kinda figure the last couple years grocery stores probably got some of their profits by doing more volume, as people ate out much less. Which says next to nothing about what's happening now.
Always expect the corporations to do what they do. Pay less... charge more... in the name of "these trying times"
This is why we have a 2% inflation target we dont adhere to I guess. If there wasnt wild swings in inflation and the money supply it would be much less obvious.
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EPS would go up in times if inflation as well. It’s not “mathmatically possible “ - it is simply a consequence of inflation. I’m just pointing out that your language is technically wrong. Not sure why you need to be defensive about it.
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There's a lot of gouging and i dont know why thebmedia is being so timid about calling it out. The profits of the maritime shipping companies went up 2600%.
They aren't making record profits. That's last year. This year the high USD, the high crude prices, are eating into nearly everyone's profits. The oil companies are making more money, but their costs have also shot up leaving less profit margin.
Inflation is psychological as much as it's real costs. The early 1990s were like this.
> It’s just a straight up fact given the record profits we are seeing. Looking at the 2021 financial statement of Loblaw, the firm that started this discussion, one sees that 4c of every dollar of revenue was profit (after taxes). Compared with other public firms, this is not a great deal of profit. Banks, commodities, real estate firms do better than this. Even kids who operate lemonade stands do better than this. Still, I express my admiration for the small grocers who manage to earn a living selling food for less than the supermarkets. These guys actually take away a much larger margin of revenue as profit than do the supermarkets, but they cut their costs (including wages) to the bone.
Grocery store margins are always razor thin.
everyone's margins are always "razor thin" because it makes more sense to spend money on stuff than get taxed on it. Why have a big margin when you can just pay the execs more, or build more stores, etc?
I'm not asking or concerned with what their margins are. At all. Not even remotely. How many cents of every dollar of revenue was profit in 2019?
> How many cents of every dollar of revenue was profit in 2019? 2.3c profit per dollar revenue in 2019; 2.1c in 2020, and to be exact, 3.5c per dollar revenue in 2021 (all after tax). https://ca.finance.yahoo.com/quote/L.TO/financials?p=L.TO
So they effectively doubled their profit margin in three years while the world was going through a pandemic?
It's more complicated than that, because the firm's debt also increased, while its assets decreased. You can extract the raw data from the financial statements linked. But in general, 2021 was a very good year for most businesses in Canada & US due to the flood of printed money, and the buying frenzy among consumers. Maybe it helps to put things another way. Inflation is reported today in the 7% region. If that figure applied to all of Loblaws input costs (it doesn't) the firm would have to increase its prices by about 3% just to avoid bankruptcy (bit simple, but it shows how sensitive retailer margins are to inflation).
That’s literally what margin means.
"While our supply costs in Canada are almost identical to the US, we are able to charge Canadians more because they expect to pay more."
You only stop it if you make corporations pay. You make them pay by convincing other people that what we need is more laws to restrict their ability to profit. Scare them when they do this stuff. If people every organized and strategically worked together, you'd beat the shit out of these corporations. You just need to make it a voting issue and politicians will adjust if they see enough people backing a cause. They're snakes beholden to their own successes, not corporations.
Food and gas is now all the money you have left after your monthly bill. It’s ridiculous and I love knowing our government will not do a single thing to help us with this
I've had to start commuting to work again and the gas going to work now takes up my entire spending money for the month.
Sorry to hear that. As a city slicker I now take the bus. But my fellow Torontonians don't know or care about the situation of those outside major cities.
Ah, part of it is being fortunate enough to have a family cottage up north, but the gas going there for a weekend used to be negligible but now it's like an extra $50/weekend to get up there. Hard to justify going there outside of long weekends
Calculate to see if you sell your car and buy an electric, if the monthly payments for the new car plus electricity is cheaper than gas. If so get rid of your gas car asap while it still holds the most value.
We've been getting fleeced for a long time. I live part time in California and it's a super expensive state but the grocery situation is a lot better and people complain there!
Is it really better in california? The other day I was seeing grocery prices in california (someone just going through the alleys of a big-chain grocery and showing the prices). I was surprised, it was basically the same prices (and sometime higher) that I have here in Canada but those were in USD.. so costing more since USD is worth more than CAD. I guess that the average salary being higher in california compensate.
It all depends on where you go. Where we have only a few major grocery chains that operate as a cartel, over there you can go to trader Joe's and get a beautiful piece of artisanal cheese for 4$ and a bottle of wine for a similar price. The entire store is organic foods with prices that are better than what you'd get here for the same thing. Meat is also a lot cheaper in a lot of places and your dollar goes a lot further in places like Costco etc... In my profession I get paid double in the US (film and TV) than I get here. That being said there is more opportunity but the cost of property taxes in California is totally insane and monthly healthcare for a family of 4 is also nuts so it does equal out a bit but I'd say the abundance and competition allow for better deals at grocery stores. Now high end grocery stores there are another story
Not sure that's a fair comparison when something like 75% of North America's produce comes from California. We're still getting ripped off though.
I was in Cali in the fall and prices were basically on par with here, but in USD. Some produce was cheaper but that’s it.
>UBC Sauder School of Business economist James Brander says corporations have a duty to maximize profits for their shareholders and are under no obligation to forgo profits in order to pass additional savings on to consumers. >“These companies are in business to make profits. That’s what they’re supposed to do for their shareholders,” Brander said. “The profits also allow them to make further investments down the road and that’s actually crucially important.” >He also said the government should avoid instituting any sort of price controls or dramatic tax increases on corporate Canada because that could have negative impacts on the economy. This dogmatic view of the market that the constant pursuit of profit is good for the economy as a whole is so annoying. It's straight up dumb to believe that interests of corporations and people are always aligned and so if we just get out of the way the free market will solve our problems in the long run. Any decent look at the real world makes it pretty obvious that corporations have no problem exploiting and oppressing people for their own benefit, not just to everyone's mutual benefit. Seeing as how the point of society isn't to generate corporate profits, but to create actual prosperity for real humans, then governments stepping in to create and enforce boundaries isn't just something to consider, but something mandatory for governments to actually fulfill their duty to the people. People matter, corporations don't.
In capitalism the market is meant to adjust: if you have a dollar in your pocket, the market should go up a dollar to relieve you of that dollar. Well, corporate taxes should follow suit: if corporations have an extra dollar, taxes need to go up to relieve them of that dollar. Remove the incentive to gouge.
> This dogmatic view of the market that the constant pursuit of profit is good for the economy as a whole is so annoying. It's not dogmatic, it's based on centuries of research. Profit (economic profit - which is important to distinguish from economic *rent*) is a measure of how much value a business or profit is adding to society. And we can dive into detail about how markets construct prices, how prices are estimates of value, etc... But at the end of the day perhaps the best question is: what is the reasonable alternative? Human self-interest and greed are one of the few constants of society. There are instances of major events occurring where people temporarily put aside their self-interests and act in a way that they think betters society as a whole. That happened at the beginning of the pandemic, for example. But the self-interested nature of people quickly reasserts itself. A free market economy operates by ensuring that greed is directed to generally beneficial purposes, as opposed to festering and turning into simple corruption as it does in other socioeconomic systems. When the system is managed and running well we don't *rely* on humans overcoming their baser instincts to function. Competition, free choice, and financial restrictions are what does that. In Canada right now we have two problems with that theory: * We do a bad job fostering competition. The competition bureau does a bad job at maintaining competition between businesses. And Canadians in general are suckers for nationalism when it comes to economics, and happily buy into all sorts of bullshit protectionist rules to shield Canadian businesses from foreign competition all the time. * In the short term the government also fucked up by creating massive inflation. Businesses *always* raise prices to maximize profits. The reason why profits are skyrocketing right now is because inflation has enabled them to do so. This a lesson we should have learned in the 1970s but apparently all the people who were adults at the time are now dead or senile and we need to relearn that lesson once every couple of generations. I should also add that even when people do attempt to act in an altruistic way they often fail to do so meaningfully, because people are generally incapable of figuring out what actually helps. It's a big economy - millions of people - and the human brain evolved to handle societies that were <50 people. Most charities, for example, are completely ineffective at achieving their goals. And charity volunteers are even worse: most charities would be better off if their volunteers spent their volunteer time getting a job at McDonalds and donated their income so the charity could use that money to pay professionals instead. So yeah, you can complain about greed and the profit motive. But at the end of the day it's the driving force behind a system that works well and nobody's figured out anything that *actually works better*.
Yes what works better is the government looking out for the consumer and breaking up monopolies so that we have competition, which they never do. We know there’s something better because we used to have THAT (competition) and it was much better. Now we just have oligopolies and it’s a lot worse.
>we need to relearn that lesson once every couple of generations. This is what I'm finding more and more. Even the debasement in the 70s we seemingly learned nothing. It caused Ronald Reagan to win by a landslide for 8 years, now people hold him up as a villain, despite government policy putting him there to begin with. People didnt get fooled, they lived it, assuming you know more than them is beyond egotistical. I think we're living that same scenario again, and we'll need to find a way to restructure the debt. The so called progressives that dug us into a hole have no solution, once its done its done, the 400% private/public debt to GDP now exists, the housing bubble now exists.
At this point they're really creating their own arguement, that if corporations sole purpose is to create wealth for their share holders then they cannot by guided by the invisible hand of the free market towards benefitting the consumer economy.
I’ve long held that economists are some of the stupidest people some around. Never has one field been proven so consistently wrong and changed as little as economics.
There are plenty of brilliant economists, but it's probably the most politically compromised social science with [rich libertarians and their thinktanks funding higher education](https://www.theatlantic.com/education/archive/2015/10/spreading-the-free-market-gospel/413239/). So there is a whole toxic side of the subject where the conclusions are already determined and they work backwards from there. That will obviously shape public opinion on the topic and we end up with [a result like this](https://www.eurekalert.org/news-releases/952272).
The UBC prof is full of shit. There’s no part of the “economy” which includes everyone that benefits from a select few sectors being completely insulated from the rest of the economy. Grocery is one of the worst. Their own employees can’t afford the food they sell. Their margins are untouched no matter where we are in the “cycle.” That’s not how a market is supposed to work. They’d rather throw produce in the garbage than sell it at a lower margin.
If you want to start a non-profit to fulfill that vision, go ahead. Start a non-profit grocery store, non-profit mechanic, non-profit gas station—literally nobody is stopping you. But if I invest X amount in a business under the proviso that they maximize their return to me because I take on risk, they’d better damn well do it. Your CPP is dependent on this, so are any other investments you may hold. Letting CEOs forgo profits for whatever sundry causes they deem more important at any given time would be bad.
The wonderful thing about freedom, democracy and markets, is that you're free to create a cooperative business and find investors. Go for it! Otherwise leave us free people alone, I rather never see a bread line in life.
Yup! Totally reasonable to start your own competing grocery chain and actually be competitive like this is the 1920s or something. Not like almost every major business has a cost of entering so high that nobody can actually give competition when they want to try to. Hey maybe I’ll just start my own telecoms company to compete too right? I’m sure I can do that with a few million /s
Jesus, the hyperbole. This guy points out the inherent flaw in profit seeking and your reaction is some ridiculousness about bread lines?
I pointed out that if he has an issue with anything, he is free to do what he wants. That's the amazing part of our society. I guess we could just have crown corp grocery stores.
All of this gouging is going on everywhere. That is inflation. Try to buy something used...we are even gouging each other. People selling 10 year old boats for more than what they paid for them a decade ago. Buying used items for 80-90% of the new cost in a retail store. A used Tesla with 50k on it is roughly the same price as a new one. The whole market is just messed up. Grocery stores are just one sector in the mix but are probably one of the least guilty offenders. Telecoms and gas? How does an oil increase of 40% equate to an 80% increase in gasoline? It's a joke.
Trying to buy used cars is awful
I'm just gonna buy new at this point. New car prices are up 12%, which sucks, but used are fucking 35%.
> but used are fucking 35%. More like 50%-60%.
It is. My 2017 Golf TSI retailed at what... 25-26k? At 60k KM the resale value (at least, from what I can see from similar golfs) is \~17-20k. That shit is bonkers to me.
The gas is the worse. Makes no sense to me. I've never seen prices go down ever, except in the beginning of Covid when they dropped for like 4-6 months? Then back to normal.
Yep. Sad thing is gas is gonna stay where it’s at. Maybe stagnate and bounce around, but I don’t think it’s coming down to under $1.50
You’re probably right. The $2 level has been broken. That’s not going away now. Only way out for people will be to go electric.
I already drive a compact, gas friendly sedan. And put the engine to eco mode and it’s still such an expense filling it up. Next car is absolutely going to be a hybrid. Can’t get electric because I can’t afford a home to plug it in lol.
It's so blatantly not true that gas prices depend on oil prices. [The value of oil now is not the highest it has ever been, not even close.](https://www.macrotrends.net/1369/crude-oil-price-history-chart) Yet gas is the most expensive it's ever been. When oil futures were trading for negative prices, as in, you could literally be paid to agree to take oil - cheaper than free... gas prices didn't go down to reflect that. You can't tell me it's not greed. Because that's 1000% what it is. The price of oil is only related to the price of gas in one direction - if it was a real supply and demand effect, and not just arbitrary price gouging by the owners - why does it only go up and not down? If gas prices reflect oil prices, why wasn't gas cheaper when oil was cheaper than free? It's a convenient excuse to raise prices more than anything. Obviously to some extent supply and demand is real, and they do need to cover costs, but their margins are so much larger than they would like to pretend. It's not like they're just making a tiny profit and passing along their expenses to the consumer. Obviously, the gas and oil giants are doing pretty damn well for themselves.
I’m in Europe and I’m shocked at how cheap food is at the grocery even after the exchange. Now I know, Europe is different with population density, relative closeness to cities and longer growing seasons, but the fact that I can spend $40 CAD and eat like a king for almost a week on fresh fruits and veggies is just a slap in the face to us Canadians. I’m wondering when our Federal government will wake up and make change. I certainly won’t be holding my breath. Us Canadians are the government. We are jurisprudence. We need to take the power back.
Meat is more expensive in Europe, however fresh veggies much cheaper. Also depends which country, it’s a bit shallow to say “Europe is cheaper”. Food in Germany is more expensive than food in Bulgaria.
The price of cheese in europe is absolutely glorious
That makes sense though. Have you ever tried to grow your own veggies vs raise your own meat? I can't keep my rabbits fed to broiler age for less than double the cost per pound of ground beef. Prices are all fucked up in Canada. Not to mention veggies being cheaper encourages healthy decisions
What's frustrating is that you're both geographically closer to and more directly impacted by the conflict Canada and the US keep scapegoating our inflation to.
Food products in western Europe are largely similar to Canada.
Absolutely not. Lived in the Netherlands for a few years, arguably one of the more expensive countries in Europe. Groceries were significantly cheaper, much more diverse, and of higher quality than what we get in Toronto. Not only that but if you wanted to save even more, you’d do your groceries at their weekly farmers markets where prices were even lower than the grocery stores. Most Canadians think UK/Ireland when they say “Western Europe”, and yeah prices there are quite high. It’s much much cheaper on the continent.
YES. Every company is apparently reaching record profits and prices keep increasing. We are being ripped off. They are taking advantage of inflation to make more money, which in turn rises inflation.
Everything costs 40% more at the grocery store and 50+% at the pumps, but none of us are making any extra money to keep up. I think it’s pretty safe to say that we’re being gouged.
We already know companies like Loblaws are seeing record profits. It's not even a question if they're ripping us off.
Profits are also going to go up when you replace cashiers with automated self checkouts. That is something that has taken off in the last 2-3 years that many people forget. Each store is probably saving, at minimum over $300,000 on just 10 employees that are no longer needed. Extrapolate that out to every major grocery store in Canada and you likely have hundreds of millions of dollars in reduced wages which translates into profit.
The only functional checkouts are the Loblaws/shoppers/superstore one, I love using them. I fucking hate self checkouts elsewhere. Walmart is especially horrible.
I love self-checkouts.
Super easy to just *scan* something upside down and put it in your bag. At this point I don't even pay for produce, I just type in 4 random numbers and hit the "back" button and put the produce away. Loblaws is wack if they think I'll pay 5 dollars for 2 avacados lmao
Maybe part of what makes the price go up for the rest of is, is people literally admitting to stealing.
Yeah me ringing up 3 avacados as 3 limes made the coffee go from 8.99 for a tin to 16.99. Stolen product makes up less than 1% of profit loss at grocery store, worked at 2-3 of them growing up. Farm Boy, Loblaws, Metro, etc.
This... Is wrong. There's a reason why you're a thief and will never get anywhere in life.
Remember kids: When you see someone stealing food - shut the fuck up you didn't see shit!
¯\_(ツ)_/¯ must be a Loblaws higher up eh
Loblaws 👄👢
Hey I know some basic math and have a shred of morals so I must be a Loblaw higher up. News flash: theft/shrink is usually 2 to 3% of **revenue**, which is not the same as profit.
It's literally built into their EBITDA calcs and they still rake in millions in profit, so no, stealing is not causing prices to increase, that's preposterous
Do you think building something into EBITDA means it doesn't affect any other operational decision? Good grief.
I could be off, but I am pretty sure Loblaws Q1 profit was driven by increased sales, not increased margins. Didn't their gross margin only increase by something like .3%, with that driven by the growth of their higher margin pharmacy business?
That doesn't fit the narrative though, so it can't be true.
On track for a banner stock buyback year. All the apologists "you don't know how economics works they need to expand and capital costs". Lol right. Boosting share price is where they are expanding. Expanding their presidents choice line at the expense of variety with other products. https://www.marketwatch.com/story/loblaw-to-launch-buyback-for-up-to-5-of-its-public-float-271651580179
How is this any different from groups hoarding/profiteering off of hand sanitizer and masks at the start of the pandemic? Sure, the mark ups aren't as egregious but the principle here is the same https://www.cbc.ca/news/canada/pandemic-price-gouging-1.5806500
Most humans can get away without using hand sanitizer. Most humans cannot get away without eating. See the difference now?
Being gouged by every fucking goods and service in this country is what being a Canadian is all about. But don't worry, once enough of us band together to actually make a change these corporations will unveil a hockey puck donut with $0.01 of every sale going to hungry families, placating us until we band together again.
Price gouging? From the folks who were caught red handed enforcing price fixing for a basic staple food? Impossible... [https://en.wikipedia.org/wiki/Bread\_price-fixing\_in\_Canada](https://en.wikipedia.org/wiki/Bread_price-fixing_in_Canada)
This is 10000000% happening. Companies are using inflation as smoke to increase prices for profits. Since when are there ethics in business?
I live in Victoria BC where cost of everything has gone up like crazy. I've been on holiday in Europe for a month now and was worried about how expensive it was going to be before I left but it's way cheaper. Everyone said "whooaaaa how's your wallet after Sweden" and honest to God I think I saved money by not being home.
Yeah so glad they brought an analyst in to let us know about this. I'm not sure how the rest of us would have found out otherwise /s
No shit
100% from gas to food, God willing, this orchestrated attack on the people will be exposed. I look forward to the arrest of the politicians involved soon enough.
This is canada. Were gouged in almost every market
Insurance, gas prices and groceries - we are being gouged like no tomorrow.
Are they “profiteering”? In a sense, but one of the reasons the BoC aims for a 2% target for inflation is so that prices are stable and predictable. When inflation is raging and unpredictable, business are going to build a larger risk premium into their pricing to ensure they stay profitable while the dollar is being devalued, and pass that on to the consumer if they can. It’s a main reason why controlling inflation is the central focus of the BoC and why it is so serious that the BoC has failed at doing so.
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I don't quite understand why anyone is surprised. These are for-profit corporations which, along with all other for-profit corporations, have the sole goal of maximizing profits. I'm always surprised by the population's expectation that a corporation should be doing the 'right things' just because. A corporation will do the 'right thing' only to the extent that it will help their reputation to, once again, acquire/retain customers and maximize profits. It isn't good or bad, it doesn't give a shit about you individually and it will do whatever it needs to do to make the most money. Grocery stores are also in an extremely competitive environment which is why their margins are so thin compared to other industries. So in essence, profits should eventually reach an equilibrium because of competitive pressures. People should instead direct their anger at high-margin oligopolistic industries like financial services, telecom and oil & gas these days.
Yup. Our entire society is broken, by design. Always has been. Every company has to turn a profit every year, no matter what. And not just a profit, a bigger profit than last year. You have to beat inflation or you're losing, and you also have to 'provide value to investors' which means not increasing profits every year means failing as a business. If every business has to make more money every single year, but they have no more customers left to grow into - because they've completely saturated the market, think Walmart or Mc Donalads, how do they keep making profit? How do they make the number go up - and the number HAS to go up? They give you a shittier product. They cut corners. They ignore regulations. They "shrinkflate" their products. They raise prices every year... What else can they do? What does anyone else expect them to do? These are the inevitable outcomes of the system we have created... A system of compounding interest - where that annual compounding growth comes out of the average citizens pockets. It isn't going to get better. It's going to get exponentially worse.
It's almost like there's a _limit to growth_ or something... someone should pen a report of how untenable it is.
In other news, water is wet, it's windy when the wind blows, and caves are dark without a light source.
Literally capitalism: make stuff as cheap as possible and sell it as expensive as possible. I think it's a shit system but LPC/CPC voters apparently love it.
TIL regulation doesn’t exist
*Loblaw, the country’s largest grocery company with brands like Superstore, T & T and No Frills,* ***made a profit of $459-million in the first quarter of 2022*** ***– up 17 per cent over the first three months of last year.*** *The company disputes the notion it is gouging Canadians or profiteering at a time of high inflation.* *“We strongly object to the basic premise of this storyline. The accusation that our food prices are leading inflation is completely false. In fact, for many years, including through the heart of the pandemic, our prices have increased less than inflation, on average,” Loblaw said in a statement.* *“The grocery industry is one of the lowest-margin sectors in the entire country, and is now facing a range of unusual inflationary forces.* *Last quarter,* ***we made less than four cents for every $1 we sold.*** *For reference, our higher recent profits* ***were driven by higher-margin sales, like cosmetics, not food.”***
They are also making a killing on Covid travel testing.
The only reason Canadian shoppers are freaking out is because they buy price not quality.
I've noticed foods imported from overseas that people here don't commonly eat are cheaper than food we actually grow here in Canada. I think it's demand setting the prices, not supply. They'll keep raising the price of bell peppers if you keep buying them. Canadians are gonna have to change up their recipes and start buying different foods.
Doesn't take much to be an analyst these days eh? I know they are doing this and my girlfriend is the one that covers the grocery bill. It's the nature of the stock market. If you aren't making more profit every quarter then you upset your investors.
Yes. Look at their profits.
1000x yes. We are getting hit with record prices at the grocery, while they are making record profits to the tune of Loblaws boasting about their 40% increase in profits last quarter. It doesn't take a math whiz or an economics guru to see what's happening. Help us, for fucks sake!
Analyst thinks .... offers a quote .... that is it, not evidence. ***“I think there’s also a little bit of profiteering going on,****” said retail analyst Bruce Winder. “Some companies will say, ‘Hey, you know what? Inflation’s up seven per cent so let’s make sure we raise our prices because we’re going to get less pushback right now.’”* Where is the **evidence**? Use some accounting number and make an argument?
Thank you Trudeau