Surging Loblaw boycott shows customer anger with grocery giant, says Mount Pearl organizer
Grocery giant recorded $13.6B in revenue in Q1 2024
Organizers of a Loblaw boycott that began Wednesday vow the effort will continue until the grocer accepts a list of its demands, including agreeing to a grocers' code of conduct and reducing food prices by 15 per cent, and some shoppers in Newfoundland and Labrador are joining in.
In the Goulds neighbourhood of St. John's, Reg Chafe said he was a loyal customer but has been boycotting the chain — which include Dominion grocery stores — for four years now.
"I totally gave up going there. Their profits are going through the roof but they're not passing it on. They're passing no savings on."
Rick Brown of Mount Pearl is one of nine moderators on the Reddit page that birthed the boycott. The page has amassed more than 64,000 members, with thousands more joining by the day.
"I've seen all the people that are suffering from lack of food, I also work with other groups. We're constantly trying to feed families," he said.
"It made me feel very hopeless. I mean, I'm retired but, like, I'm lucky that I'm still able to work. But I have friends who are both retired and on the fixed income, and the food has become such a portion of your income that, you know, something has to give."
Sylvain Charlebois, director of Agri-Food Analytics Lab at Dalhousie University, blames increasing food prices in Loblaws stores on increased fees being charged to suppliers by the grocery giant.
"What's unique about the food processing industry is that suppliers have to pay their clients in order to do business with them," Charlebois, known on social media as the "Food Professor" told CBC News in a recent interview.
Loblaw, Walmart and other brands are increasing their supplier fees to compensate for increases in their own operational costs, Charlebois says. "One charges more, then the other charges more, and at the end of the line, it's the consumer who pays."
Packaging, labour and farm inputs — costs related to fertilizer, pesticides, machinery and fuel — have all increased, Charlebois says.
Rick Bidgood, owner of Bidgood's Supermarket in Goulds, says independent operations like his have also had to increase their prices.
"Since COVID there's new charges, new fuel surcharges that we never had before. Again, that has to be passed on. All the costs are going to be passed on to the customer," he said Tuesday.
"We keep it down, we absorb as much as we can as the cost. But again, you can only go so far with that. You're in business to stay in business. You know, you have to make a profit."
Brown is one of many questioning Loblaws' increasing profits amid a food insecurity crisis.
"You see these big monopolies that are making megabucks, billions and billions of dollars, and people can't afford to eat," he said.
Sylvain Charlebois cautions Loblaw's numbers merit a closer examination.
"It's completely normal for a company to post record profits," he said. "But when you look at the percentages … there really hasn't been much of an increase."
Despite its profit increases, Loblaw's profit margins have barely budged, says Charlebois.
Charlebois himself has faced criticism — in 2018, his lab received a $60,000 grant from the Weston Foundation, which has ties to Loblaw. He says the funding was provided to a student. Still, the Food Professor says the grocery giant has some explaining to do.
"Is Loblaws to blame for certain things? Absolutely," he said. "Loblaws is part of a bigger problem, but it's not towards the consumer, it's towards the industry.
"It's wrong to say Loblaws is unjustifiably increasing its prices, but is Loblaws abusing its power in the supply chain? Absolutely. Same goes for Walmart."
Charlebois calls on the federal government to mandate a grocer code of conduct to solve the issue of increasing supplier fees.
Costco and IGA, among others, showed support for a voluntary code of conduct floated by a House of Commons committee studying food prices.
Galen Weston, chair of Loblaw's board of directors, has said a number of clauses in the proposed code — such as a dispute resolution mechanism — would cause food prices to go up, not down. However, in recent days, Loblaw CEO Per Bank has said he's become "cautiously optimistic" about how such a code would work.
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