COMMONS
CANADALAND #914 Stock Buybacks: How Grocers Eat Themselves
Jan 3, 2024
William Lazonick, professor emeritus of economics at University of Massachusetts discusses the controversy surrounding stock buybacks in the grocery sector, focusing on Canada's big grocery chains and their profit margins. He highlights the significant size and expansion of stock buyback programs of Loblaws, Metro, and Sobs, amounting to over $3 billion. The podcast also delves into the struggles of grocery workers who are demanding fair wages amidst high profits. It explores the legality, profitability, and history of stock buybacks, as well as their impact on economic growth, employees, and customers. The origins of the concept of maximizing shareholder value and the self-serving nature of buybacks are also examined. Finally, the chapter analyzes tax policies and makes a plea for listener support.
38:51
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Quick takeaways
- The three largest grocery chains in Canada have spent billions on stock buybacks, raising concerns about low wages and inflated food prices.
- Stock buybacks by grocery chains have diverted funds from investment and innovation, leading to criticisms about prioritizing shareholder value over workers' well-being and the overall economy.
Deep dives
Grocery industry focused on stock buybacks
The episode explores the issue of stock buybacks in the grocery industry. Despite claims of financial strains, the three largest grocery chains in Canada have collectively spent billions of dollars on stock buybacks in recent years. These buybacks have raised concerns about low wages, inflated food prices, and the diversion of funds from investment and innovation. Critics argue that buybacks prioritize shareholder value over the well-being of workers and the overall economy. There is a growing pushback against stock buybacks, with calls for stricter regulations and higher taxes to curb these practices.
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