At the end of July, nearly 3,700 frontline store employees at 27 Metro grocery stores rejected an agreement that had been reached by their union bargaining committee just after a strike deadline. Employees at Metro saw the deal as unfair and not keeping up with the cost of living especially the cost of groceries, which is still at a high rate. Workers walked off the job Saturday instead of accepting the deal.
“We can’t afford to buy the groceries that we put up on shelves ourselves,” said Jason Sylvester, a Metro meat department manager. “We just want to keep up with the world.”
While metro employees have struggled to afford the very food they help provide, Metro has been experiencing record-breaking profits, in fact, all of Canada’s major food retailers have. The consumer price index for grocery items is around twenty points higher than for other goods. There are several reasons for the added cost of food, but employees do not care, what they see is an employer that is willing to pay below survival wages.
The Economics of Food
While inflation has dropped by nearly three percent over the last year, food prices are up by around nine percent. To the everyday person, this is proof Metro and other retailers, who control over 80% of the grocery market in Canada, are price-gouging consumers.
Price gouging is the practice of increasing the prices of goods, services, or commodities to a level much higher than is considered reasonable or fair. Usually, this event occurs after a demand or supply shock like the ones we have experienced since the pandemic.
Will Huggins, who teaches finance and business economics at McMaster University in Ontario is part of a sizeable group of experts who disagree. Economists and business leaders have put forward several other reasons for the higher prices of groceries as compared to other goods. Some of them include the Ukraine War disrupting supply chains, the lower Canadian dollar and the effects of climate/weather.
“Everybody would love there to be a single demon we could name, but the truth is that there are a bunch of little factors, there are a bunch of straws building up on the camel’s back,” said Huggins. But what even Huggins agrees to is the dominant position of Metro, Sobeys, Costco and other grocers over the Canadian market. With five companies having such a large share of the market, many have called the food retail industry in the nation oligopolistic, meaning it is controlled by a few players, much like a cartel or OPEC.
Workers Express Power
With trends of quiet quitting, lying flat, and other employment trends, now more than ever Canadians are finding they have collective bargaining power. Unifor Local 414, the union representing the striking workers, is asking Metro to increase the wages of full-time and part-time workers to keep up with the price increases Metro perpetuates. Yet in asking for higher salaries are employees creating the food inflation that hurts them?
Huggins seems to think so, or at least he alludes to this when he talks about the changes needed to bring down prices:
“It takes all these things to start to normalize — the supply chain, which it did since late 2021, wage growth in Canada is still kind of elevated at the moment, … the impact on commodity prices from the Russian invasion to Ukraine.”
According to Canada’s Food Price Report 2023 from the Agri-Food Analytics Lab at Dalhousie University predicts that an average family of four will spend up to $1,065 more on food compared to 2022 with increases mainly in vegetables, meat and dairy. This means all Canadians should expect groceries to become more expensive in the medium term. At a certain level workers will have no choice but to quit if they cannot even afford food, much less accommodations.
After a hard-fought win for B.C.’s dockworkers, there is more energy in Canada’s worker’s movement. Lucky for business leaders Canada’s continuingly growing immigration numbers can stop any massive efforts to strike in low-skill fields like food retail. In 3rd quarter of 2023, Metro claims net earnings skyrocketed 26 percent to $346.7 million from $275 million a year earlier. If they do not settle on a deal this strike to spill over into a more significant national movement for higher pay and more say.