Evidence of Grocery ‘Greedflation’ Is Weak, Says Food Researcher

A woman shops for produce at a grocery store in Toronto, in a file photo. (The Canadian Press/Nathan Denette)

Available evidence suggesting that grocers are increasing food prices under the guise of inflation—a phenomenon also known as “greedflation”—is “weak, at best,” says Sylvain Charlebois, a researcher and professor in food policy and distribution.

“Accusations of gouging in the food industry have reached an all-time high,” Charlebois said while testifying before the House of Commons finance committee on Sept. 28.

Charlebois said a recent survey found that 80 percent of Canadians believe food corporations “are taking advantage of the inflationary cycle to increase prices.”

Charlebois, the director of Agri-Food Analytics Lab at Dalhousie University, said he has investigated the matter with the help of several other food distribution researchers and found that “any evidence of ‘greedflation’ in food retail in Canada is weak at best.”

“That said, some prices in some categories have behaved unreasonably in recent years,” he added.

A recent Statistics Canada report, “Monthly Average Retail Prices For Selected Products,” showed that common grocery items like eggs, beef, and coffee have shot up in average price over the past year.

According to the report, the average price of 340 grams of roasted or ground coffee rose from $5.58 to $6.34  between July 2021 and July 2022. The average cost of a dozen eggs increased from $3.82 to $4.29 in the same time period, and ground beef rose from $9.41 per kilogram to $10.64.

“Accepting that greedflation exists and accusing companies of being abusive, though, is the easy part,” Charlebois said. “Where it gets challenging, is to set thresholds.”

“How much is too much? Is it four percent, is it five percent, 10 percent—where should the line be?”

‘Rushing to Judgment’

Karl Littler, senior vice president of the Retail Council of Canada who also appeared before the committee, denied that big grocers are increasing profits and driving up inflation at the expense of their customers.

“Some commentators are rushing to judgment or seeking to play the blame game for their own purposes,” Littler said.

Littler attributed rising food prices to the vendors—“manufacturers, processors, and wholesalers”—who he said are themselves grappling with rising costs passed down from farmers and producers.

“Why are these vendors’ prices rising so rapidly? Because vendors’ own costs are soaring, primarily because prices from farmers, growers, and importers have been increasing at unprecedented rates,” he said. “And the farmers themselves have been hit hard.”

Littler added that rising fertilizer prices are driving up farmers’ production costs, which in turn is leading to higher retail prices.

He also cited “war, extreme weather events, and soaring fuel prices,” as well as supply chain disruptions and labour shortages, as other factors contributing to higher production and food costs.

To combat grocers potentially profiting from inflation concerns, Charlebois said a “code of conduct for grocers and vendors” should be considered, which would provide closer governance over food prices and markups.