Loblaw discount change spurs backlash: ‘How can they do that?’

Click to play video: '‘Another manifestation of corporate greed’: Food shoppers angry about inflation, deflating discounts'
‘Another manifestation of corporate greed’: Food shoppers angry about inflation, deflating discounts
WATCH: As Canadians lament the rising cost of food, now the country's largest grocer is reducing its discounts on items that are about to expire. Abigail Bimman reports on the fresh backlash against Loblaw, and the calls for the Competition Bureau to investigate. – Jan 16, 2024

Canada’s largest grocery company Loblaw confirmed that it’s no longer offering discounts of up to 50 per cent on items nearing expiry.

It’s a move that the Canadian Association of Retired Persons (CARP) is surprised and disappointed by.

“It is a major increase for some people. It really hurts them. And we were very surprised and disappointed that a company would do something like this,” CARP chief education and advocacy officer Bill VanGorder told Global News.

Click to play video: 'Loblaw to end 50-per-cent markdowns on expiring food items'
Loblaw to end 50-per-cent markdowns on expiring food items

He said it’s unusual for CARP members to reach out to the organization on issues unprompted, but the organization began receiving calls about seniors across Canada noticing the change last Wednesday.

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“This very small amount of business selling food that they would have to throw out anyway. How does that really impact their bottom line? We understand they’re making pretty good profits already anyway,” VanGorder said.

“Why are they picking on this small group of people who really need this kind of help to buy food that other people don’t want because it’s stale? It doesn’t make sense. Ethically, how can they do that?”

Click to play video: '‘Skimpflation’ hits grocery store aisles amid rising inflationary pressures'
‘Skimpflation’ hits grocery store aisles amid rising inflationary pressures

Loblaw spokeswoman Catherine Thomas says the grocer is instead offering 30 per cent off on last-day sale items across the board in order to be more predictable and consistent.

Thomas says in a statement that Loblaw has always offered between 30 and 50 per cent on last-day sale items.

This change is also causing concern for students at the University of Ottawa. The closest grocery store to campus is a Loblaw location, about a 15 to-20-minute walk away, according to student union president Delphine Robitalle.

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“So Loblaws has already taken away the 10 per cent discount for students on Tuesdays, instead replacing it with a points incentive,” she said.

“Our food bank has seen a 250 per cent increase in users over the last year. So it’s now up to students to meet that need.”

In real numbers, Robitalle says the student union food bank serves 400 to 500 people a month. Most of these people are undergrad students, but she says some graduate students and even the odd university employee or faculty member uses their services.

Click to play video: 'Canada’s grocery giants not cooperative with pricing investigation'
Canada’s grocery giants not cooperative with pricing investigation

Thomas says the grocer offers many ways to save through promotions and flyers, and also offers deep discounts on food nearing expiration through Flashfood, an app that connects consumers with discounted food at retailers.

“The challenge with Flashfood is that you have to buy a picture. You can’t see the product, you have to go online on the app, buy the product, and then show up at the grocery store to collect whatever you bought,” explained Sylvain Charlebois, a food researcher from Dalhousie University.

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“These discounted products typically would require some on-site evaluation from the consumer just to assess whether or not the product is acceptable to consume or not.”

For her own shopping, Robitalle says she would often take advantage of the 50 per cent discount on things like bread so she could freeze a loaf or two at a discount.

“It’s placing barriers to affordability for students who may be working full time and studying full time. We don’t have time to clip coupon or chase after deals,” Robitalle said.

How is Ottawa responding?

Food inflation at the grocery store has been in the spotlight even as it’s slowed from multi-decade highs, with grocery prices rising 4.7 per cent year over year in November, holding steady in December.

Innovation Minister François-Philippe Champagne has been pushing for grocers to come up with plans to stabilize prices.

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“While Canadians still pay too much for groceries, CPI numbers published this morning show signs that food inflation is stabilizing.  We will continue to hold the industry accountable to bring relief to Canadian consumers,” Champagne said in a statement.

As for Loblaw’s discount policy change, the minister deferred comment on any allegations of “discount-fixing” to the Competition Bureau.

The bureau says that it is aware of the change but says it would be inappropriate to comment. Their statement says that the Competition Act mandates any work they do must be kept confidential until conclusions are reached. This includes whether an investigation exists or not.

Click to play video: 'Loblaw head Galen Weston says grocery code of conduct would raise food prices'
Loblaw head Galen Weston says grocery code of conduct would raise food prices

VanGorder says that CARP members who spoke with managers at their local Loblaw stores have been told the policy change is to match the near-expiry discount offered by Sobey’s.

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“This is raising prices based on competition. If what the local store managers are telling our members this is true,” he said.

With the increased focus on competition in the grocery sector, Charlebois argues that Loblaw’s discount change goes against that push.

“So, in a free market consumers would expect grocers to offer the best deals possible and not necessarily just copy the competition but that seems to be the priority here by Loblaw, which to me is quite disturbing given all of the things that we’ve heard about competition in the last several months,” Charlebois said.

With files from The Canadian Press. 

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