Monday, June 17, 2024

Loblaw leaders call criticism ‘misguided,’ say they aren’t to blame for high food prices

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Loblaw chairman Galen Weston and the company’s new CEO are pushing back against critics who blame the grocery giant for soaring food prices, as a month-long boycott of the retailer gets underway.


Speaking at the company’s annual meeting, President and CEO Per Bank said misinformation about Loblaw is circulating online leading to what he referred to as “misguided criticism” of the retailer. A Reddit page called “Loblaws is out of control” has more than 67,000 members and has led the charge in encouraging a boycott.


“I think it’s great that people are standing up,” says Caroline Schwim, a Loblaws customer who has decided to participate in the boycott told CTV News “I come from a country (South Africa) where there’s a Competition Commission and I think the canoodling and price fixing between the shops here is really disgusting.”


Consumers are voicing their frustration and anger online, upset with food prices and big grocer, which have consistently reported large profits as the cost of food has climbed.


In its latest quarterly earnings report, Loblaw saw its profits grow nearly 10 per cent compared to last year, to $459 million. Empire, which owns Sobeys, also reported an increase in profit last quarter, with net earnings of $134.2 million. Metro saw its profits drop, but still pulled in $187.1 million, down from $218.8 million the year before.


“As a well-known company and Canada’s largest grocer, it is natural that Loblaw would be singled out as a focal point for media and government and of course consumer frustrations,” said Weston, assuring shareholders the company continues to act with integrity.


It’s a pledge reiterated by Bank, who said the company is working hard to “reduce costs and do things more efficiently.”


Loblaw has set up a meeting with the boycott organizers. It’s an example of the company’s willingness to engage with customers, experts say, even though strong earnings reports can undermine that message.


“I think there is some indication that they are listening to the criticism,” said Monica Labarge, a marketing professor at Queen’s University. “But at the same time. then you have these earnings reports that come out that make it sound a little bit like they are saying one thing on one hand and doing another.”


There have also been calls to steal from Loblaw, something the boycott organizers say they are not affiliated with. Both Bank and Weston slammed the idea, saying they are hopeful Canadians will reject it.


“There’s a group of people who have been relentlessly propagating a narrative that they know is false,” Weston said. “And it is now being used to justify theft on a grand scale.”


While food prices are still rising, they aren’t going up as quickly as they once were. Statistics Canada says the food inflation rate in March was 1.9 per cent compared to the year before, lower than February’s annual rate of 2.4 per cent. In late 2022 and early 2023, grocery inflation peaked at 11.4 per cent.


With files from The Canadian Press 

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