Report on grocery store competition reveals about profit margins

What a highly anticipated report on grocery store competition reveals about profit margins, barriers

https://www.ctvnews.ca/politics/what-a-highly-anticipated-report-on-grocery-store-competition-reveals-about-profit-margins-barriers-1.6458050?

By Spencer Van Dyk  CTV News Parliamentary Bureau Writer,  June 27, 2023

关于杂货店竞赛的备受期待的报告揭示了利润率，障碍

Spencer Van Dyk CTV新闻议会局作家，2023年6月27日

加拿大竞争局呼吁各级政府促进杂货行业的竞争，以降低购物者的价格。该独立机构去年10月启动了对加拿大零售杂货市场的研究，并在周二发布的报告中向政府提出了一些建议，以鼓励该行业竞争。

即，竞争局建议加拿大制定一项策略，以促进新型的杂货业务，例如在线杂货店，鼓励独立和国际杂货店进入加拿大市场，介绍单位定价要求，并采取措施限制限制财产控制的措施 行业。

报告指出：“加拿大的杂货业集中。” “对于中小型企业来说，很难与加拿大的杂货巨头有效竞争。 对于新企业来说，成功进入该行业也是一项挑战。”它也写道：“没有竞争环境的变化，加拿大人将无法从竞争价格和产品选择中完全受益。”

这项考试是在政治上对杂货成本不断上升的关注之中的提高。 10月，下议院一致通过了一项新民主党动议，呼吁联邦政府采取措施来应对“贪婪”，包括要求竞争局调查杂货连锁利润。

这是报告的关键收获和建议。增长到边缘开始大流行
据加拿大三个最大的杂货店（Loblaw，Sobeys and Metro）称，去年的竞争局汇总了超过1000亿美元的销售额，并获得了超过36亿美元的利润。

竞争局竞赛促销分部副专员安东尼·杜罗谢（Anthony Durocher）说：“这项研究是在一个重要的时候。” 越来越合并。

“我们不是为了回应任何特定的不法行为指控，而是确定竞争问题是否可能导致杂货价格上涨，以及政府是否可以采取一些措施来改善竞争，以帮助控制杂货的增加 价格，” Durocher还说。

竞争局的报告同时，杂货店巨头的利润率（而不是整体上涨或公司的利润上涨），以表明需要更多的竞争。

为此，该报告的一个关键发现是，自2017年以来，该国最大的杂货商食品毛利率增加了大约一个或两个百分点，因此，在“ covid-the-covid- 19）流行和当前的通货膨胀期。”

该利润率大致相当于每花100美元用于食品杂货的额外$ 1-2，并且根据报告，“杂货店在每个物品上的收益都相对较少，但数量的利润很少。”

购物者需要更多的价格比较信息
竞争局作为报告的一部分呼吁省级和地区政府介绍有关单位定价信息的规则，因此购物者可以就在哪里找到最佳交易做出更明智的决定。

单位定价显示，除了产品的总成本外，标准包装尺寸的价格，例如，每100毫升橙汁的成本。

虽然加拿大的许多地方已经显示出他们的单位定价，但在魁北克的法律上只需要。 新西兰，澳大利亚和英国都实施了单位定价法规，这些规定有助于消费者比较成本。

该报告建议省和地区政府共同努力，在全国范围内制定一致的单位定价规则。

报告指出：“当消费者知道从哪里获得最佳交易时，竞争最有效。”

更独立的国际杂货店需要
该报告还呼吁政府鼓励独立和国际杂货店进入加拿大市场，并为他们提供现有的“重大障碍”。

报告指出：“独立人士在加拿大各地的社区中发挥了重要作用，但是如果没有政府的支持，我们不应该期望他们在不久的将来会大大扩展。”

它也指出：“新竞争对手的进入和现有独立人士的增长将增加竞争，增强消费者的能力，并推动企业降低价格，提高产品质量和创新。”

许多独立的杂货店，雅气

The Competition Bureau of Canada is calling on all levels of government to boost competition in the grocery industry, in a bid to lower prices for shoppers.

The independent agency launched its study of Canada’s retail grocery market last October, and in its report, published Tuesday, made several recommendations to government to encourage competition in the industry.

Namely, the Competition Bureau is recommending that Canada develop a strategy to promote new types of grocery businesses, such as online grocers, encourage independent and international grocers to enter the Canadian market, introduce unit pricing requirements, and take measures to limit property controls in the industry.

“Canada’s grocery industry is concentrated,” the report states. “It can be difficult for small and medium-sized businesses to compete effectively against Canada’s grocery giants. It is also challenging for new businesses to enter the industry successfully.”

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RELATED LINKS

• Competition Bureau Retail Grocery Market Study Report

“Without changes in the competitive landscape, Canadians will not be able to fully benefit from competitive prices and product choices,” it also reads.

The examination comes amid heightened political attention on the rising cost of groceries. In October, the House of Commons unanimously passed an NDP motion calling on the federal government to take steps to tackle "greedflation," including asking the competition bureau to investigate grocery chain profits.

Here are the key takeaways and recommendations from the report.

INCREASES TO MARGINS STARTED PRE-PANDEMIC

According to the Competition Bureau, Canada’s three largest grocers — Loblaw, Sobeys and Metro — last year collectively reported more than $100 billion in sales and earned more than $3.6 billion in profits.

“This study came at an important time,” said Anthony Durocher, deputy commissioner of the competition promotion branch at the Competition Bureau, who added grocery prices have been increasing at their fastest rate in more than 40 years, while the retail grocery industry has become increasingly consolidated.

“We undertook this study not in response to any specific allegations of wrongdoing, but to determine whether competition issues could be contributing to rising grocery prices, and whether there are steps that governments can take to improve competition as a way to help rein in rising grocery prices,” Durocher also said.

The Competition Bureau report meanwhile points to the grocery giants’ margins — as opposed to the cost of food, which is rising overall, or the companies’ profits — as an indicator that there is a need for more competition.

To that end, a key finding of the report is that the country’s largest grocers’ food gross margins have increased by about one or two percentage points since 2017, so the increases started three years before the “supply chain disruptions faced during the (COVID-19) pandemic and the current inflationary period.”

That margin is roughly equivalent to an additional $1-2 for each $100 spent on groceries, and according to the report, “grocers make relatively little on each item, but make their profits in volume.”

SHOPPERS NEED MORE PRICE COMPARISON INFORMATION

The Competition Bureau as part of its report is calling on the provincial and territorial governments to introduce rules around unit pricing information, so shoppers can make more informed decisions about where to find the best deals.

Unit pricing shows, in addition to the total cost of a product, the price for a standard package size, for example, the cost per 100 millilitres of orange juice.

While many places in Canada already display their unit pricing, it is only legally required in Quebec. New Zealand, Australia, and the U.K. have all implemented forms unit pricing regulations, which help consumers compare costs.

The report recommends provincial and territorial governments work together to put in place consistent unit pricing rules across the country.

“Competition works best when consumers know where to get the best deals,” the report states.

MORE INDEPENDENT, INTERNATIONAL GROCERS NEEDED

The report also calls on governments to encourage independent and international grocers to enter the Canadian market, and lays out the existing “significant barriers” for them in doing so.

“Independents play an important role in communities across Canada, but without government support, we should not expect them to significantly expand in the near future,” the report states.

“The entry of new competitors and growth of existing independents would increase competition, empower consumers, and drive businesses to lower prices, improve product quality, and innovate,” it also states.

Many independent grocers, according to the Competition Bureau, must buy groceries wholesale from their competitors because they are not large enough to have their own warehouses, and they are concerned about then being bought out by a larger chain, among other challenges.

Canada’s size and low population density also add to the challenge of building a network, while the country’s largest grocers operate thousands of stores and have an existing robust network.

“Despite these challenges, we are of the view that attracting new grocers to the Canadian market is one of the key levers governments have to help bring about lower prices and greater choices for Canadians,” Durocher said.

With files from CTVNews.ca Senior Digital Parliamentary Reporter Rachel Aiello