The simple balance between store revenue and food security


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Food prices in Canada continue to rise in the face of unemployment, rising commodity prices and the end of the chain. Statistics Canada reports that food production in the country is expected to grow by 7.4 percent and will increase in the coming months.

Last December, Canada’s Food Price Report 2022 predicted food prices in Canada would rise sharply by up to seven percent, but there is strong anticipation that market turmoil could be due to the conflict. in Ukraine prices will increase this year. This could affect food stores which has been a major factor in rising food prices.

Inflation is at its highest level since 1991. This is driven by serious concerns about food security as it rises. of food, energy, gas and housing costs.

Contrary to rising food prices, it is clear that some consumers are feeling greedy and using the extra money to increase prices. There may be more skepticism in the food industry, but we need to be careful before making a quick decision.

It’s a little more than you think

At the Agri-food Analytics Lab, our research closely follows food prices. Each year, we forecast food types to increase or decrease in value, and quantity. Normally, we get it right, but this year, food prices are set to rise ahead of our forecast.

A comparison of the cash segments calculated from their annual reports published in 2021 for the three major stores – Loblaws, Sobeys and Metro – against Canadian companies in other segments shows to us their financial impact is very low. At the end of their fiscal years in 2021, revenue will be 3.7 percent for Loblaws, 2.7 percent for Empire / Sobeys and 4.5 percent for Metro.

Of course, these are interesting results; income is rising more than in the years before the disease, but these numbers are below the rise in food consumption. In other words, these chains really work poundif we compare it with the rising cost of living.

The food sector has less revenue than any other sector. The income of large Canadian companies in other industries is higher than that of large food chains. For example, in 2021, Enbridge’s revenue will reach 13.4 percent and Telus ’revenue will reach 9.8 percent. In the banking sector, the Bank of Nova Scotia’s margin is 33.8 percent – nearly 10 times higher than that of food issuers.

Wealth and food security

While the balance between income and food security is nothing new, a business that uses inflationary winds is innocent and corrupt. However, it would not be possible to confirm the availability of the property, without approval as per the 2017 announcement by Loblaws, which allows participation in the regulation of the bread price.

With no real consequences imposed on the participants, the customers were frustrated, even though the Competition Bureau’s investigation didn’t give much. Because of this abuse, the industry needs its share of damages.

The balance between income and social responsibility is relatively low on food, compared to other types of occupations. However, if some people think that our customer has a lot of money, then the question needs to be asked: what is the proper threshold of earning money by donating food? One percent? Three percent? Five percent?

How do we protect customers?

In order to protect consumers, one applies price regulation. This trend applies to certain products such as milk and beer, among others. However, the state’s influx of thousands of products would become a reality in the industry and the economy, leading to high operating costs that would be eliminated by taxpayers.

In Canada, we have some of the best food retail businesses, but the lack of competition in the country often invites criticism. We only have five major players in the offering stores: Empire / Sobeys, Loblaws, Metro, Costco and Walmart.

As complaints about funding continue, advertisers are able to show sympathy to the public. Retail and advertising costs are low these days and there are jumps since the onset of the disease.

Consumers are increasingly paying attention during illness, which is one of the areas that will be open on a regular basis. Within a few days, they will need to put in place protective measures and make a quick change to the online store. Actions to support struggling consumers, such as offering discounts for food that is closer to its quality than it used to be, are a big key to the future.

Metro has taken a step in the right direction by announcing that it will use its shares to cut some of the cost of food prices. Other customers have to find ways to improve their sales ability, they can’t rest on their laurels. If the big chains don’t show their intention to help the customer who is struggling to balance their money as a result of the increase, the condemnation of their value will increase.

The Harvard economist is weighing the latest inflation data

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