Recently leaked documents posted on Reddit have shed light on the pricing practices of Loblaw Companies’ (TSX: L) flagship grocery chain Loblaws, revealing exorbitant markups on everyday items such as butter, cheese, and spreads. The documents, purportedly an invoice from Loblaws to a No Frills store, highlight significant profit margins, raising questions about fairness and transparency in retail pricing.
At the center of the revelations is the Gross Profit Margin (GPM), a key metric in retail indicating the percentage of revenue that exceeds the cost of goods sold. In this case, the leaked documents reveal GPMs as high as 53.75% for President’s Choice Unsalted Butter Alternative, suggesting a considerable markup on a staple grocery item.
The retail giant has long been marred with issues on extremely high grocery prices, with Metro Inc. (TSX: MRU) taking a legal action alleging that Loblaws falsely implicated Metro in a bread price-fixing conspiracy, causing damage to its reputation.
Based on indicated GPMs, some of the products sold at more than 40% markup include: No Name Sour Cream (51.48%), President’s Choice Original Lemonade (49.17%), Derlea Garlic Spread (46.55%), Gay Lea Unsalted Butter (45.57%), Silk True Almond (44.66%), Astro Original Yogurt (43.41%), President’s Choice Kefir (41.38%), and Kraft Natural Cheese (40.81%).