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Loblaw profits increase as some Canadians boycott company's grocery stores

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Those who are boycotting are doing so by choosing to shop at other stores and cancelling memberships and credit cards with Loblaw-owned stores

Published May 01, 2024  •  Last updated May 02, 2024  •  5 minute read

Pictured is the Southport Real Canadian Superstore. Azin Ghaffari/Postmedia

Originally created as a space for people to vent about high grocery costs, a subreddit titled r/loblawsisoutofcontrol has started a nationwide boycott of Loblaw-owned stores for the month of May.

The online group's goal is to highlight the "ridiculous cost of living in Canada right now," according to their page, specifically calling out company chairman Galen Weston for raising prices and collecting profit while "Canadians struggle to make ends meet."

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It is unclear how many people will participate in the boycott, but the Reddit page where it originated has more than 60,000 members.

Stuart Smyth, Professor and Agri-Food Innovation & Sustainability Enhancement Chair at the University of Saskatchewan, said the impact of the boycott depends on how much those boycotting are typically spending per month on groceries.

If these are shoppers buying for families and spending $200 or more on each grocery trip, there will be a noticeable difference, but if they are convenience shoppers who stop for a couple of items while they are out, "the impact will be quite negligible."

Those who are boycotting are doing so by choosing to shop at other stores and cancelling memberships and credit cards with Loblaw-owned stores. Calgary members posting to the subreddit are suggesting the Calgary Farmers' Market and local butchers as options for meat and produce.

Smyth notes that other retailers will be paying attention to traffic in their stores that are in close proximity to Loblaw stores. "Depending on what their margins are, that may lead to the temptation to increase prices."

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The online community has a list of demands:

Members are also calling on elected officials to show support of the demands and commit to increasing choice and competition within the grocery industry.

Moderators of the online community have listed alternatives to major grocery retailers, detailed by province. They encourage boycotters to shop at farmers' markets and independent grocery stores.

Some Reddit users claiming to be employees of Loblaw-owned stores have commented that they are not to blame for price increases and will also be participating in the boycott. Comments say that employees are being mistreated and underpaid.

Jordan Bruce, a data analyst, has not been to a Superstore in years. "At this point, I am trying to balance cost with quality," he said on why he chooses not to shop at the grocery store nearest to him. "It's less about convenience."

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Bruce lives near a Sobeys, a Superstore and a Co-op, and chooses Co-op for the cost-to-quality ratio.

A boycott is not an option for some, however. Kara Deshaies, a high school teacher in rural Saskatchewan, said she would like to participate but can't due to location.

"We have two grocery stores — an Independent Grocer (Loblaw) and a Co-op. But Co-op doesn't sell things I very much need like baby formula."

Calgary shoppers have ample choices, though those with no access to a vehicle, a limited gas budget or lacking transit options may struggle to participate in a boycott.

Referencing rural Prairie communities, Smyth noted there is "considerably reduced availability in terms of grocery store options." Members of rural communities wanting to participate in the boycott may see an increase in the cost of purchasing groceries by driving to a different community.

"I would be quite skeptical that people would have the disposable income to be willing to drive any additional distance," said Smyth, referencing the cost of gas as an obstacle. "They're going to be doing that math very carefully."

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Loblaw hikes dividend as profit rises almost 10 per cent

This boycott begins as Loblaw Companies Ltd. released its recent earnings, showing a revenue increase of $13.58 billion in the quarter that ended March 23, an increase of $586 million compared to the previous year.

Net earnings were up 9.8 per cent to $459 million, while earnings per diluted common share rose 14 per cent to $1.47.

The grocery and drugstore retailer also raised its quarterly dividend by 15 per cent to 51.3 cents per share, up from 44.6 cents.

The company said customer traffic increased as prices at its stores rose less than the general level of food inflation tracked by the consumer price index.

Loblaw chief executive Per Bank says the company is paying attention to customers and sees them trying to mitigate inflation by seeking out sales, buying more private-label products and shopping at discount stores.

Loblaw has to keep looking for ways to provide value to keep people coming back, he said: "We don't have a contract with our customers. They can choose to shop elsewhere tomorrow, if they don't like the offer that we're giving." Bank says he takes customer complaints personally, and if customers aren't happy, "that's something I want to fix."

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A petition asking the federal government to investigate Loblaw Companies Ltd. and introduce legislation preventing further monopolization of essential goods has reached more than 100,000 signatures. The petition is not connected to the Reddit group, but has been promoted on it.

"This is not left vs. right, middle vs. low class, boycotters vs. those not able to, and so on. This is Canadians from coast to coast vs. corporate greed, oligarchs and monopolies running our country into the ground," said the subreddit's creator, Emily Johnson, in a post on Tuesday. "Canadians will no longer stay complacent."

Government intervention needed, advocates say

Smyth said that the government is mandated to address food inflation but has been unwilling to make policy changes that could lead to addressing the factors that affect food pricing. Smyth noted a shortage of 20,000 to 30,000 truck drivers in Canada that is driving food price increases, as well as the carbon tax on the transportation of food items.

"The federal government has had a number of policy options available to them, but they have simply chosen to not act," said Smyth, noting that food retail CEOs' "hands are tied in a lot of cases."

"The government is doing a good job of passing blame to the retailers."

— With files from Denise Paglinawan and Canadian Press

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