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Originally Posted by White Out 403
Our food supply and specifically our grocery stores are not in a competitive Marketplace where supply and demand functions properly. We have two companies that basically own almost all the grocery stores in the country, and profits have gone up way past inflation. There's actually some really great journalism going on about this, I would encourage you to check it out
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I'd love to see this journalism as well. The reality is that for Loblaws the long-term growth rate of the stock is 1.7%. I can already hear you saying that the share price is not indicative (I disagree, but we can dig a little deeper!)
Their sales/revenue were up about 6% from December 2020 to December 2021. The estimate for 2022 shows an increase of about 3.2% The 5 year average for them in terms of sales is 2.8% growth per year. Nothing egregious there. They have increased their net income and earnings per share, but that's not indicative of them gouging on price. They've reduced the number of shares outstanding by about 3.5% over the past 5 years, so you have to consider that when you look at the EPS.
And in case you think Loblaws is just finding a way around this, Empire is not in a different boat. They grew sales from 2021-22 by about 6.3% as well and the projections are for 3.5% into 2023.
It's just not the goldmine that people try to imply. Frankly, you also have to remember that (particularly in the case of Loblaws) you're not only talking about groceries here. Pharmacy is a significant driver for them, and Shoppers makes up about 27-28% of that revenue.