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RIP, corporate greed.

As inflation took off this spring, progressive critics pointed to “greed-flation,” arguing that avaricious grocery and energy companies were bilking consumers by sneakily boosting their prices beyond what was justified by their own rising costs.

But the most recent quarterly reports show that profit margins at major grocers have either dipped or stayed flat – and never really moved outside of recent average levels. Meanwhile, refining margins have retreated, contributing to a weeks-long drop in pump prices.

So, good news: Corporate greed has been vanquished, at least if you are relying on the logic of the federal New Democrats and left-leaning economists and media.

However, NDP Leader Jagmeet Singh isn’t giving up the fight against greed-flation quite yet. In an Aug. 3 Twitter thread, Mr. Singh decried corporate greed, as exemplified by Loblaw Co. Ltd. L-T

“Corporate greed is Loblaw’s gross profit jumping 21% while the wages of its workers are unable to keep up with rising inflation,” he wrote, repeating his position that the federal Liberals should broaden their excess profits tax and use the proceeds to send money to cash-strapped lower-income Canadians.

Mr. Singh’s arithmetic is opaque: The dollar amount of Loblaw’s second-quarter gross profit actually rose 4.9 per cent, compared with the year-ago quarter. Or, if you prefer, gross profit rose 5.8 per cent compared to the preceding first quarter. (The party did not respond to questions about Mr. Singh’s calculations, or his wider claim of corporate-driven inflation.)

More to the point, Loblaw’s gross profit margins barely budged. It’s those margins that matter, particularly in an inflationary environment where prices are rising, pushing up the dollar value of gross profits. If Loblaw were indeed opportunistically boosting its prices, those margins would be rising substantially.

They are not. In the second quarter ended June 18, Loblaw’s gross margin for its retail operations edged up slightly to 31.4 per cent from 31.1 per cent in its first quarter. But the company said its margin on food sales was flat; the increase in margin came from its pharmacy operations, including from increasing sales of higher-profit items, such as cosmetics.

Gross margins actually fell in the most recent quarter for Empire Co. Ltd. EMP-A-T, which operates the Sobeys and Longo’s chains. Empire’s gross margin in the quarter ended May 7 was 25.6 per cent, down from both the first quarter and the second quarter a year ago.

Gross margins came up repeatedly during the conference call this week for Metro Inc.’s third-quarter earnings – but financial analysts were pressing the company about the decline in its margins. Chief executive officer Eric La Flèche told analysts that his company is essentially subsidizing grocery-store shoppers, with increased profits at pharmacy operations offsetting tighter margins from food sales so far this fiscal year.

“We haven’t been able to pass on all the cost increases in food,” he said. Far from inflation being an opportunity to increase profitability, Mr. La Flèche said it is putting pressure on margins – the diametric opposite to the assertions made by the NDP and others.

Metro does appear to be benefiting from surging prices, although not in the nefarious way that Mr. Singh asserts. The company said its sales of its higher-margin hot food and deli products are rising as consumers eschew suddenly pricier restaurants in favour of take-home meals.

None of that is a shock to Sylvain Charlebois, director of the agri-food analytics lab at Dalhousie University. Prof. Charlebois, with Dalhousie accounting professor Samantha Taylor, published a report last month that analyzed gross profit margins for Loblaw, Empire and Metro between 2017 and 2021. Their findings: Gross profit margins had risen slightly, but were relatively stable. That does not constitute greed-flation, Prof. Charlebois said in an interview.

A follow-up report slated to be published later this month will compare the gross margins of Canadian and U.S. grocery retailers. Full results aren’t yet available, but Prof. Charlebois said margins in the two countries are similar, rebutting the notion that Canada’s big grocery chains wield market-distorting power.

But much of the discussion about greed-flation at the grocery store ignores that data, and instead taps into the public’s dislike of Big Grocery. “It’s an easy target,” he said.

Sheila Block, senior economist with the Canadian Centre for Policy Alternatives, said the most recent financial results from the grocery retail industry do weaken the case that greed-flation is still taking place. “We’re getting some mixed signals now,” she said.

But Ms. Block said she has no doubt that grocers used the cover of inflation to boost prices earlier this year, stopping only when consumers became increasingly sensitized to rising costs.

Michelle Wasylyshen, national spokeswoman for the Retail Council of Canada, said the profit margins of grocery chains are slender compared to those of the food vendors that supply them products.

Indeed, Prof. Charlebois said greed-flation might exist in the food industry – and if it does, it’s taking place among food vendors, not grocery stores, whose pricing decisions are in full public view.

Still, he acknowledges that continuing controversy over bread prices has left many Canadians wary of the industry. The Competition Bureau has an investigation of price-fixing, which came into public view in 2017. That year, Loblaw and its parent George Weston Ltd., also then the owner of bread maker Weston Foods, said they had reached a deal with the bureau for their role in an alleged conspiracy by several companies in the food industry to fix bread prices between 2001 and 2015. No other food company has made such an admission, and several have issued strong statements of denial.

“Consumers have every right to be skeptical,” Prof. Charlebois said.

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