Food inflation: TikToker calls out No Frills for 'unbelievable' grocery prices

Grocery chains are no strangers to being called out by shoppers this year amid sky-high food inflation.

The latest viral video is hitting No Frills, the discount supermarket chain owned by Loblaws, for unnecessarily raising their prices.

On Monday morning, TikToker @bean.andsprout posted a video after a trip to the supermarket.

In the video, the woman says she went to No Frills for a bag of McDonalds ground coffee and parmesan cheese. She was stunned to find that the total for those two things came up to almost $17.

"I don't know where No Frills has found the audacity to f***ing charge what they are charging, it's unbelievable," she said. "I just left the grocery store and I literally feel sick to my stomach."

She also recalled shopping at No Frills as a child and how the store was always targeted towards the minimum wage income group.

“When I was growing up, No Frills was like the lowest of the low,” she said. “Like you felt poor just being in a No Frills. Just the atmosphere — everything was like dirt f**** cheap. It was full of No Name stuff. Like, that’s where you could grocery shop if you were minimum wage, borderline poverty, or poverty. That’s where I shopped.”

She said that although she usually shops at Walmart because of their considerably lower prices, she went to No Frills because it's closer for her.

According to her, the small chip size bag of Crispy Minis was priced at $3.59 in No Frills, while the same bag at Walmart costed less.

"They’re like $1.29 at Walmart, I think, for a bag; $3.59 at No Frills," the TikToker said.

Although the prices varied due to product offerings and size, Yahoo News Canada did find that the products mentioned in the video were priced higher on the No Frills website than on Walmart's.

For instance, while a 100g bag of Quaker Crispy Minis costs $3.29 at No Frills, the same 100g bag costs $2.97 at Walmart.

Similarly, the premium McCafe Premium Roast Pods (30 pack) is priced at $24.99 at No Frills, while Walmart is selling the same pack for $22.97. Moreover, as of March 29, Walmart is also offering a discount if one buys two packs, making one pack of premium roast pods for only $19.

"My husband makes decent amount of money, we have four children, one on the way, and I'm freaking out," the TikToker said. "If the people who are currently living comfortably are shocked by these prices, what are the people who don't have a decent income doing? I'm so afraid for these people."

Identical products sold at different prices? Experts weigh in

According to the University of Toronto Professor of Marketing David Soberman, some big retail chains, like Walmart, are able to keep their prices lower than others because of two reasons: lower margins, or better rates from manufacturers.

"One, maybe they're willing to live with a lower margin because they have much bigger volumes. Or second, and this is generally perhaps the stronger of the two reasons, which is that their volumes are so big, they are able to negotiate better prices with manufacturers," Soberman said.

Soberman added that although one of the reasons for Loblaws' high prices is because their products on average are better quality, another reason is because their target is a higher income segment group.

"Loblaws has what I would call a higher income segment. So, they typically charge higher prices. Because the people that are shopping, they're willing to pay that. So as a retailer, you always want to try to charge the prices allow you to maximize your profit," he says.

Another UofT lecturer and expert Daniel Tsai also believes that large retailers, like Walmart, use their bulk purchasing power and low pricing strategies to keep the prices competitively low.

"Walmart relies on what is called an EDLP— everyday low pricing strategy. So, they use their massive buying power to get the best prices from suppliers and effectively lower their margins. This way, they can offer the prices that are better than the competition," Tsai said. "That's why, when you walk into Walmart, not all but around 70-80 per cent of the products are cheaper."

However, Tsai strongly believes that stores are using inflation as an excuse to increase prices and pass on the costs to consumers.

"Let's not mistake ourselves here. Grocery stores are also using inflation as an excuse to increase prices. Even if the price of goods go up by 10 per cent, but their margin stays the same at 30 per cent, they're still making a 30 per cent margin and making a lot of money," Tsai said.

A market research report found that 83 per cent of Canadians think inflation is being used as an excuse for price gouging. Seventy-six per cent of shoppers also said that food inflation has had a negative impact on their ability to eat well.

Statistics Canada data from February showed that prices for food purchased from stores rose 10.6 per cent, marking the seventh consecutive month of double-digit increases.

"Continuing to put upward pressure on grocery prices are supply constraints amid unfavourable weather in growing regions, as well as higher input costs such as animal feed, energy and packaging materials," the report said.

Prices for cereal products went up 14.8 per cent, seafood and marine products 7.4 per cent, and sugar and confectionary rose by 6 per cent.

Federal grocery rebates

As part of the 2023 federal budget, the Canadian government introduced a one-time payment for low- and middle-income families in Canada to offset their food costs.

This one-time payment, called "grocery rebate," will provide eligible families with up to $467. The rebate for eligible individuals will max out at $234, while seniors are expected to receive an average of $225.

“[W]e all know our more vulnerable friends and neighbours are still suffering from higher prices,” Finance Minister Chrystia Freeland said after tabling the budget on March 28. “That’s why our budget contains targeted, temporary relief from the effects of inflation for those who need it.”

Although the budget didn't outline specific income limits, the government did say that the rebates will be delivered as part of the GST credit.

After the Liberal government fulfilled its promises to the NDP as part of their confidence-and-supply agreement, NDP Leader Jagmeet Singh tweeted about the win and promised that the party will keep fighting to make "CEOs pay what they owe."

However, many people have criticized the government for using tax dollars to provide temporary relief to Canadians instead of regulating food prices on private grocery chains like Loblaws.

One Twitter user said: "Instead of investigating/stopping grocers from price gouging, the government is going to give people subsidies so they're able to keep prices high?"

Another user pointed out that the one-time payment does little or nothing to help the crisis. "Injecting more stimulus into the economy does not curb inflation," they wrote.

More residents react to federal grocery rebates