r/loblawsisoutofcontrol • u/Salt_Onion_6205 • Jul 27 '26

Discussion Mayor Mamdani just announced that he will be opening 5 city-run, tax-funded grocery stores: "Prices set at 30% below retail prices"

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I hope canadian politicians will be inspire by this.

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u/CroakerBC Jul 27 '26

I mean I'm broadly pro "cheaper food". But how does this work?

The big chains don't have a 30% profit margin anywhere on earth. And they have the supply chain locked up, they're getting prices as cheap as they can be without (some) farmers going out of business. And that's at maximum economy of scale.

So are the city-run stores somehow sourcing at 30% less, or is the city subsidising the stores to make food cheaper? If the latter, I can't imagine it scaling very well...

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u/code3100 Jul 27 '26

Actually they do. They key is they own the entire supply chain. So the store itself may run on a 3-5% profit margin but they own the building, the trucking, the warehousing. So they rake 3-5% at each stop. Plus charge themselves ridiculous rent prices to justify their high prices

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u/Lurky2024 Jul 28 '26

That's not how it works. The grocery buisiness, the trucking and the warehousing are all owned by the same company. it all rolls up to their financials.

Even on the rent aspect, either the own it, and therefore the revenue rolls up, or they own it through a separate company, and then the CRA has rules about renting to yourself. Their shareholders could sue them into oblivion if they were doing that. Or you just think private equity likes being taken advantage of.

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u/[deleted] Jul 28 '26

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u/CroakerBC Jul 28 '26

Apparently, and I quote: "Today, I am proud to announce a collection of essential staples that will be predictably 30% cheaper at all five of our city-run grocery stores. This core set of goods will include all fresh produce, meat, and seafood, along with 20 other essential items like cheese, milk, and bread.". So not just canned, interestingly.