Socialists blame grocers for inflation

Hard data demonstrate this is propaganda devoid of substance

Keir Starmer, Jagmeet Singh and Kamala Harris have in common a campaign to blame inflation on profits of grocers rather than on their own policies. The data don’t line up with the rhetoric.

In the U.K. profit margins in 2023 for grocers were lower than in 2019 according to McKinsey & Company, Inc.

Canadian grocers gross profit margins are virtually unchanged since 2021, although selling, general and administrative costs have risen.

In United States, grocery store profit margins after tax have improved from pandemic levels but have fallen in the most recent quarters and are just over 4% of sales. Despite Kamala Harris propaganda, it is clear that grocery store profits are not the cause of any significant part of the over 20% increase in the cost of living for American households during the Biden-Harris administration. But propaganda works, grocers are great scapegoats for bad policy, and Democrats buy this crap since it suits them.

The cause of inflation is not “corporate greed”, it is institutional stupidity. Print enough money when there is not much slack in the labor pool and the result is inflation. Curb the production of energy and drive up energy prices and the result is inflation. Borrow enormous amounts of money and raise interest rates to slow the rate of inflation and the immediate result is more inflation. It takes time for higher rates to slow economic growth but the higher rates themselves increase the cost of credit card and mortgage debt and contribute to higher prices until the economy falters. Raise corporate taxes and businesses will increase prices to maintain margins and the result is higher inflation. Impose a useless “carbon tax” and the result is inflation.

Governments spend too much time claiming victory when the “rate” of inflation begins to fall, but it is not the “rate” of price increases that makes it hard to pay the bills, it is the cumulative rise in prices to the extent they outpace increases in wages, and when wages do increase, they comprise higher costs leading to (you guessed it) higher inflation.

By the middle of the Biden Administration, the differences between Biden’s policy choices and Trump’s were stark when expressed as outcomes. This chart is from the fall of 2022.

By the summer of 2023, the Biden policies saw American families suffer an increased cost of living of over $13,000 each year. Canadian families suffered even worse outcomes of the Trudeau Liberal governments’ policies.

Trump has the solution to higher inflation - “drill baby drill”. Increases in energy supply will ease energy prices and energy has more impact on retail prices than interest rates do, since energy flows through everything that is trucked, railed, flown, or refrigerated. Pierre Poilievre has the solution for Canada - in addition to expansion of the output of Canada’s vast oil & gas resources, Poilievre says he will repeal the toxic “carbon tax”; cut the size of the civil service; and, reduce taxes.

Blaming grocers for punishing increases in the cost of goods is a leftist cop out. Grocers are not responsible, leftist policies are. And it is time for voters to change the direction Washington and Ottawa are taking both the U.S. and Canada.