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The high price of tigers

HILE housewives protest

high prices across the

land, in the capital city a
Senate-House Committee has
been having a series of hearings
with representatives of the big
food chains which are very re-
Vealing.

Steinberg, A. & P., Dominion,
Loblaws and Safeways have all
had their day before the com-
mittee and one gets quite a pic-
ture of squirming executives try-
ing to put the blame on some-
One else to explain the soaring
prices.

Let’s look at some of the

_ things the hearings broughit out.

G. N. Provost appeared for
the A.&P. First, he wanted
Some of his testimony treated
as confidential. One presumes it
is the public he wants to hide
things from as much as, or more
than, from his competitors.

Where does he say the high

' prices come from? “I do not hold

myself up as an expert,” he
Said, “but I would say that this
happened because of the rising
cost of raw materials, packag-
ing and processing. Every time
you turn around, prices have
gone up and the primary manu-
facturers should be asked the
reason.”

He also said that the adver-
tising costs of national brands
and trading stamps and other
promotional gimmicks contri-
bute to supermarket prices.

As an example he said his
Store sold a 24-ounce package
of detergent for 45 cents com-
pared with the “tiger-powered”
Tide, adding, “perhaps this is
because the cost of tigers comes
Pretty high.”

Canadian sales of A. & P. have
risen to $218,390,000 in 1965
Compared to $195,219,000 in
1961. Profit in. 1965 was $5,110,-
000, or 2.34 percent of total
Sales.

Then along came the repre-
sentatives of Dominion Stores.
This is Canada’s largest single
food chain, with 380 stores in
10 provinces. They only made a
profit after taxes on sales of
2.07 percent. This is “danger-
ously thin,” their spokesrnan de-
Clared to the committee.

-A counsel for the committee,

‘however, drew attention to the

fact that their last annual report
showed dividends have climbed
to 72 cents a share in 1966 as
compared to 23%4 cents a share
10 years ago. ;

Dominion also blamed the
high prices on the wholesalers
wiggling out of any real answer
to a question as to why the pro-
fit margin on bacon was 30 per-
cent as compared to only 12-13

percent on eggs.

Housewives will be glad to

Know that really they are the

Culprits because they demand
frozen and instant foods rather
than items they have to prepare.
One wonders: if the housewives

(

By PHYLLIS CLARKE

started the whole new trend in
food processing to frozen and
instant foods why is it so neces-

sary to spend millions on adver- .

tising to convince her to buy
these products? “Tastes better
than real orange juice,” goes one
commercial; which leads one to
believe that the housewives are
pressured into some of these
items rather than the other way
round. Dominion. representatives
did not deal with this either.

Small-time operator Steinberg
followed. His company only has
157 supermarkets and 11 depart-
ment stores,

He has a solution in standard

sizes of packaging. As for trad-- -

ing stamps — and who doesn’t
save Pinkies? — they are good
because they are popular with
the customers. So are lower

‘prices popular with the cus-

tomers but on this nought was
said.

A question by one of the com-
mittee members as to why but-
ter is marked up 4.4 percent,
suger 15 percent and Prem meat
30.5 percent, got the weird an-
swer that if we only mark up

butter 4.4 percent we have to

mark up something else more!

Steinberg’s profit in 1966 was
$7,639,00 on a total sales of
$400,882,000.

Fourth up to bat was Lob-

law Groceterias Co. Ltd. Lob-

law’s empire includes five whol-
ly-owned subsidiaries — Power
Supermarkets Ltd. Pickering
Farms, Super City Discount
Foods, Busy Bee Stores and OK

Economy Stores. They also con-
trol three major wholesalers,
Kelly, Douglas and Co. of Van-
couver, York Trading and Na-
tional Grocers of Toronto.

Disclosed at these hearings
was the fact that Loblaw Can-
adian profit-is almost double
their U:S. profit rate.

As the owner- of wholesalers,
Loblaws had: to come up with
another scapegoat. High prices,
according to their spokesmen
were due to higher operational
costs and increased expenses for
everything from fringe bénefits
and transportation to municipal
and sales taxes. The latest. pro-
fit figures for this compariy are
shown in the reproduction on
this page.

One can certainly agree with
Senator Jean-Paul Deschatelets
when he proposed to Loblaws
that they should consider giv-
ing leadership by adopting a
crash program of reducing pric-
es) which they are in a position
to do even by accepting the
same profit rate in Canada as in
the U.S.). He suggested this
would be the “best promotion
ever” for a Canadian super-
market chain.

Then came the company with
the highest profit rate, Canada
Safeway. Figures elicited show-
ed that their profits have dou-
bled in the 1960s and now their
rate stands at 2.56 percent of
sales. This, it turns out, is also
one percent higher than for the

PAIS. Safeway profits. The rea-
‘son for the difference given by

the company’s speaker was the
great “efficiency” in Canada.

Safeway doesn’t blame any-

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Sales profit
Sef records
for Loblaw

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one for-the higher prices. It just:
Says they aren’t there. Contrary
to widespread publicity, they
Say many items cost about the
same or less than a year ago. To
bear this out they showed com-
parative prices on 88 items of
which 17 were lower, 33 higher
and 38 the same. So the only
solution is obviously to get hold
of that list of 17 items that are
less and hope you can feed your
family on them. Suspicious
housewives may think that when
the government food index.
shows an increase in prices
they're not wrong in thinking
that it’s costing them more than
a year ago.

These were just the first five
of 16 companies that were due
to appear before the Senate-
House Committee but already
some conclusions can be drawn.

The thought that prices will
get lower because of the altru-
ism of the chains stores is wish-
ful thinking. Obviously they are
all going to try to figure out the
way to get to Safeways’ profit
rate and you know who'll pay
for that. ;

The fight against the super-
markets wil also have to be
waged against the big profiteer-
ing food processing and whole-
saling companies. And the way
to get at all of them in the final
analysis will have to be by govy-
ernment action.

Back in 1959 the Royal Com-
mission on Price Spreads pro-
posed that there ‘should be a
profit level set and that every-
thing made above such a level
should go in taxes. Such a pro-
posal is one of the ways, along
with a prices control board, that
one can visualize for putting
some curbs on these giant food
chains.

It is to be hoped that after
the Senate-House. Committee
has heard from all the super-
markets they will hear from ~
those at the mercy of these com-
panies, the Canadian consumers,
who not only don’t want expen-
Sive tigers in their. Tide, but also

. object to superprofits for super-

marketeers. °

November 4, 1966—PACIFIC TRIBUNE—Page