'They just can’t be justified': Empire's Medline says multinational suppliers still driving food inflation

Sobeys parent says food inflation in its stores lower than consumer price index

The chief executive of Canada’s second-largest grocery chain says multinational food suppliers are still passing along price increases that are forcing the cost of groceries up for Canadians, even as inflation ebbs.

“They just can’t be justified,” Empire Co. Ltd. CEO Michael Medline told investors on a Dec. 14 call to discuss the company’s fiscal second quarter earnings. “Inflationary times are not an excuse to pass every single rising cost down to grocers, and most importantly, to Canadians. This is not the way business was conducted before these inflationary times.”

Canada’s grocery giants have been on the hot seat when it comes to rising food prices, with some accusing them of profiteering. Chief executives of Loblaw Companies Ltd., Metro Inc., Empire, Walmart Canada Corp. and Costco Wholesale Canada Ltd. were summoned to Ottawa in September, where the met with MPs including Industry Minister Francois-Philippe Champagne and Deputy Prime Minister Chrystia Freeland before pledging to work to stabilize prices.

Since then, however, the grocers have repeatedly pointed the finger at suppliers for ongoing inflationary pressures.

While stabilizing food prices for Canadians is a “top priority” for Empire, Medline said the grocer cannot keep prices down on its own.

“I’ve got to emphasize that all key players in the food supply chain have a role to play in stabilizing food prices; not only grocery retailers.”

Medline said Empire has noticed customers are feeling the strain of higher interest rates and economic uncertainty and that shoppers began cutting costs in August as a result.

It’s part of the reason the company reported disappointing results in its latest quarter, he said. (Financial Times)