“There are too many Mercedes and Range Rovers in the Maxi,” says Loblaw’s big boss

More affluent shoppers than ever before are looking for bargains in the aisles of discount grocery stores, Loblaw’s chief executive said Wednesday.

• Also Read: Metro posts increase in turnover

• Also Read: Inflation in Canada continues at 6.9%

“We see a lot of Mercedes and Range Rovers in the parking lots of these stores [de rabais] than before,” Galen G. Weston said while presenting his company’s most recent financial results.

“Discount formats are successful in converting high-income customers,” added the person who owns the Provigo and Maxi brands in Quebec.

In its third quarter, Loblaw, Canada’s largest supermarket chain, saw profits rise 29% over the same period last year.

Net profit was $556 million on revenue of $17.4 billion.

On an adjusted basis, profit was $663 million, an increase of 22.8%.

Its results are similar to recent inflation figures. Food prices rose 11% in October from 11.4% in September.

Food inflation outpaced core inflation for the 12th consecutive month – it was 6.9% in October.

“We don’t take advantage of inflation to increase profits,” Richard Dufresne, Loblaw’s chief financial officer, repeated several times during Wednesday’s results presentation.

The increase in the company’s profit margins will instead come from increased purchases of makeup and perfumes.

The company explains that this shift in consumer shopping habits will come as the pandemic subsides and people return to the workplace.

Profit margins are higher on perfume than on broccoli, it adds.

By looking at the company’s figures, it is impossible to know which shares come from its pharmacy sector (Pharmaprix) and which shares come from grocery stores (Provigo and Maxi in Quebec).

So we have to take the company’s word for it for now.

The pressure is on

During a conference call Wednesday, an analyst asked Loblaw officials if they had begun working with federal authorities.

“Yes”, was all we answered, before a heavy silence fell over the line.

The Competition Bureau announced last month that it would look into the case of grocery profits. The federal body will study the retail food sector and release its final report in June 2023.

Three weeks ago, the House of Commons Agriculture Committee also held an inquiry.