Pierre Riel, executive VP and COO, was the last of the big five grocers called upon to answer questions about the rapid increase in the cost of food and growing retailer profits.
Costco has not been increasing its profits as grocery prices have gone up, the head of the retailer’s Canadian operations told Members of Parliament studying the issue of food inflation – echoing the message of other major grocers who have come before the committee.
“The final price our members pay for food is dependent on many factors at each stage of the supply chain,” Mr. Riel said in French, pointing to multiple factors such as global commodity markets, labour shortages contributing to higher wages, and prices charged by suppliers. The chief executive officers of other grocers such as Walmart Canada and Metro Inc. also pointed to stresses across the supply chain, emphasizing that retailers are not solely responsible for food inflation.
Mr. Riel told the committee that on a global basis, 58.5 per cent of Costco’s total pre-tax profits come from membership fees. The chain’s overall profit margin on the merchandise it sold worldwide over the past three years was 1.43 per cent, he added. He declined to provide numbers specific to the Canadian market.
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