On the social media site formerly known as Twitter, L. Wayne Mathison explains why the headline profits of grocery stores bear almost no relation to the far smaller actual profits in the grocery retail market:
“Leader IGA” by daryl_mitchell is licensed under CC BY-SA 2.0 
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The 32% Illusion: A Grocer’s View from Behind the Till
I used to own the IGA in Hamiota. Small town. Thin margins. Real bills. So when I hear that Loblaw Companies Limited is raking in “31–32% profit”, I don’t get angry. I get tired.
Here’s the move. Take a gross margin number. Call it profit. Add a dash of politics. Serve hot.
Gross margin is revenue minus cost of goods sold. That’s it. It doesn’t include payroll, hydro, insurance, property tax, refrigeration repairs at 2 a.m., shrink, theft, advertising, transport, interest, or the banker breathing down your neck. Net profit is what’s left after all of that. In grocery, that number floats around 2 to 3 percent in a good year. Some years less. Some years negative.
When I ran my store, payroll alone could swallow most of the gross margin. Then add freight. Then add utilities. Manitoba winters are not kind to freezers. Then add spoilage. Bananas do not care about your ideology. They rot on schedule.
People think grocers “set prices”. That’s half true at best. Suppliers raise costs. Fuel goes up. Wages rise. Carbon costs ripple through trucking and farming. You pass it on or you close. It’s arithmetic, not greed.
Now here’s the uncomfortable part. Food inflation hurts. It hurts seniors. It hurts young families. It hurts the clerk stocking shelves. But blaming a 30% “profit margin” is a shortcut. It feels good. It’s wrong.
Big chains make money on scale, pharmacy, cosmetics, financial services. Those categories carry higher margins than milk and bread. That lifts the consolidated gross margin number. It does not mean grocery aisles are printing cash.
We should argue about competition. We should argue about supply management. We should argue about taxes embedded at every step of the chain. Good. Let’s do that. But at least use the right numbers.
I spent years watching pennies. Grocers survive on volume and efficiency. A few cents per dollar is the game. Always has been.
If you want lower food prices, focus on input costs, transport, energy, regulation, and competition. Start there.
And before sharing the next viral graphic, ask one question: gross or net?
That single distinction separates outrage from reality.
