Canadian Federal Politics Thread v5

[peter12]

Originally Posted by Harry Lime

Loblaw earns $529M in Q4 profits as Canadians struggle with rising food prices. Almost a 10% rise in profits. Does anyone think that the government will act on this, or is it a 'let them eat cake' scenario?

https://www.cbc.ca/news/business/lob...2022-1.6757480

Honestly, government should be doing something about this. Maybe not price controls but something.

[BlackArcher101]

Is there stats on food waste at the grocery store level? The amount of produce I see rotting on the shelf or how few days it lasts after buying makes me wonder how much they already throw out. Just getting worse and worse it seems as people buy less of it.

[Monahammer]

Originally Posted by BlackArcher101

Is there stats on food waste at the grocery store level? The amount of produce I see rotting on the shelf or how few days it lasts after buying makes me wonder how much they already throw out. Just getting worse and worse it seems as people buy less of it.

The last few times I've bought produce, it has barely lasted over a week before starting to rot or developing mold. It's getting intolerable.

[Street Pharmacist]

Originally Posted by Harry Lime

Loblaw earns $529M in Q4 profits as Canadians struggle with rising food prices. Almost a 10% rise in profits. Does anyone think that the government will act on this, or is it a 'let them eat cake' scenario?

https://www.cbc.ca/news/business/lob...2022-1.6757480

That's a bit misleading:

The grocer's gross margins also dipped slightly in the quarter ended Dec. 31, with an adjusted gross profit of 30.6 per cent down from 30.9 per cent in the same quarter a year earlier.

The company said a decrease in its food retail margin -- largely related to its No Name price freeze and increased promotional activity --was partially offset by growth in higher margin drug retail sales.

https://www.ctvnews.ca/business/lobl...ston-1.6285718


There was a substantial increase in OTC and cosmetic sales in 2022 which are much higher margin, as well as money from COVID vaccines and other things inflating profits. I get that I'm biased because I own a Shoppers which is a Loblaws subsidiary, but I don't think that's an entirely fair reading of the earnings call or reporting

[CaptainCrunch]

Originally Posted by peter12

Honestly, government should be doing something about this. Maybe not price controls but something.

Food for the most part is high volume low profit items.

There have been some interesting papers from Dalhousie on the subject.

But there's more then just the narrative of, those greedy grocers. There's transportation elements, food production costs. a loonie with weakened buying power. What items are profitable which are not.

I know that they're bringing in CEO's to the house, but I think that the answers to this are more then Capitalism bad, there's a huge combined element here.

And no, the last thing I want to see is government cost control. Or whatever without the government knowing what's going on.

[Street Pharmacist]

I know it's a hot button topic and I should probably not comment due to my financial conflict of interest in this discussion, but food inflation is the same or worse in every country. Our food inflation is the same as the US and it's much higher in Europe and elsewhere. Loblaws food margins peaked in 2021 and have fallen since then, and most of the increase in profit is due to SDM outperforming in sales and pharmacy services, which will be mostly a one time thing. Typical in store food margins are very slim, but cosmetics for example is 40% plus. It only takes a small increase in cosmetic sales to offset and margin loss in food if the size of the business is substantial or not

[Slava]

Originally Posted by Street Pharmacist

I know it's a hot button topic and I should probably not comment due to my financial conflict of interest in this discussion, but food inflation is the same or worse in every country. Our food inflation is the same as the US and it's much higher in Europe and elsewhere. Loblaws food margins peaked in 2021 and have fallen since then, and most of the increase in profit is due to SDM outperforming in sales and pharmacy services, which will be mostly a one time thing. Typical in store food margins are very slim, but cosmetics for example is 40% plus. It only takes a small increase in cosmetic sales to offset and margin loss in food if the size of the business is substantial or not

I thin kit was in the interest rates thread where I went through and broke out the revenues for the various areas that Loblaws operates in. They've got higher margins than other grocers because they have more offerings that are not groceries. There's nothing particularly egregious there though.

[GGG]

Originally Posted by Street Pharmacist

I know it's a hot button topic and I should probably not comment due to my financial conflict of interest in this discussion, but food inflation is the same or worse in every country. Our food inflation is the same as the US and it's much higher in Europe and elsewhere. Loblaws food margins peaked in 2021 and have fallen since then, and most of the increase in profit is due to SDM outperforming in sales and pharmacy services, which will be mostly a one time thing. Typical in store food margins are very slim, but cosmetics for example is 40% plus. It only takes a small increase in cosmetic sales to offset and margin loss in food if the size of the business is substantial or not

On the other hand this is a company that literally fixed the price of bread.

Zero benefit of the doubt should be given and all actions of the major grocers should be scrutinized given their oligopoly status.

[Derek Sutton]

We can go on and on about Loblaws profits, yet they are still the least expensive grocery option out there.

[Azure]

Originally Posted by Slava

Well, that food inflation is not as bad in Canada as other countries. And, notably inflation continues to decline. For January it was lower than consensus estimates, and falling faster than what was thought.

Food is difficult because there are a lot of factors. One being things like Avian Flu, or the lettuce virus/weather in the fall. Both of those issues push prices up (and cause supply problems). Major inputs like fuel have declined substantially from a year ago, and we might see some relief in that sense.

And...it's really not a government issue, despite the CPC and NDP wanting to pin it on the Liberals. Food prices are up everywhere.

Every single issue you mentioned has happened for years and we never saw food inflation like this.

We're not seeing any relief. On top of that the BoC thinks if they raise interest rates ONE MORE TIME, it will help. Hilarious.

[Mr.Coffee]

More like price caps and cost control legislation on pharmaceutical companies and transportation / shipping companies; over grocers. What do those industries' profit margins look like lately?

[Slava]

Originally Posted by Azure

Every single issue you mentioned has happened for years and we never saw food inflation like this.

We're not seeing any relief. On top of that the BoC thinks if they raise interest rates ONE MORE TIME, it will help. Hilarious.

The BoC is pausing though, and not only did they say that in January, the latest inflation figure was lower than estimates. That doesn't signal an unexpected rate hike.

[Street Pharmacist]

Originally Posted by Mr.Coffee

More like price caps and cost control legislation on pharmaceutical companies and transportation / shipping companies; over grocers. What do those industries' profit margins look like lately?

Depends on what you mean by pharmaceutical companies, but if you mean drug manufacturers, we already do have price control legislation.

https://www.canada.ca/en/patented-me...es-review.html

[opendoor]

Originally Posted by Azure

Every single issue you mentioned has happened for years and we never saw food inflation like this.

Food has been pretty volatile in modern history, so I don't know that what we're seeing is totally unprecedented. There have been 6 different points since 2000 where grocery inflation has been 5+%:

2001: 6.1%
2007: 5.0%
2009: 9.5%
2011: 5.4%
2015: 5.7%
Now: 11.4%

So right now is definitely higher, but that's largely because inflation overall is higher; those prior peaks happened with 2-3% inflation.

And unlike overall inflation, grocery prices deflate relatively often with inflation peaks normally being followed quickly by deflationary periods. Grocery prices in 2019 were lower than in 2015, for instance. And because of that, in the last decade we're still at ~3% inflation in grocery prices per year, even with the high increases we've seen recently.

[calgarygeologist]

Originally Posted by Slava

The BoC is pausing though, and not only did they say that in January, the latest inflation figure was lower than estimates. That doesn't signal an unexpected rate hike.

Rate hike pausing seems pretty uncertain at this point. I'll believe it when I see it. It sounds like the US Fed might not be done yet and I don't know if the Canadians will diverge from the decisions made in the US.

[GGG]

Originally Posted by calgarygeologist

Rate hike pausing seems pretty uncertain at this point. I'll believe it when I see it. It sounds like the US Fed might not be done yet and I don't know if the Canadians will diverge from the decisions made in the US.

US housing is taking back off again because the 30 year rate came down because people believe the fed was done raising rates so the market reflected it. With Canadas 5 yr mortgages this affect is less pronounced.

https://fred.stlouisfed.org/series/MORTGAGE30US

As one can see the rate dropped to around 6 and now with the last months info priced in is back up towards 6.5. So the perception of what the Fed might do is influencing the rate which influences what the fed will do. The feed back loop seems really fast right now leading to an overdamped response.

[Roughneck]

Originally Posted by Cappy

I'm pretty sure this is how democracy dies in countries.

"Hey guys, why are we worrying about the brownshirts/blackshirts beating up protestors, we are in the middle of the Great Depression!"

But think about the good thing the brownshirts did for the economy...

https://twitter.com/user/status/1628882426675056641

[calculoso]

Very centrist group :/

https://twitter.com/user/status/1628881196729143296

[Erick Estrada]

Ha ha ha. Wow that's bad on a lot of levels.

[GordonBlue]

Originally Posted by Roughneck

But think about the good thing the brownshirts did for the economy...

https://twitter.com/user/status/1628882426675056641

things like this shows why I would actually consider voting Liberal despite how morally bankrupt and corrupt they are.

I would rather have that then what the Cons are becoming.

disgusting. truly disgusting.