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As Loblaw boycott begins, what to know about all the company’s brands

Click to play video: 'Boycott Loblaw month begins in Canada'
Boycott Loblaw month begins in Canada
May 1 marks the beginning of a grassroots movement to boycott the Loblaw chain for a month over the rising price of groceries. But will it work? Kristen Robinson reports – May 1, 2024

Organizers of a fast-growing boycott movement against Loblaw over high food prices say they are keenly aware they need to target more than just grocery stores to impact the mammoth corporation’s bottom line.

Loblaw Companies Ltd. is the parent company of nearly two-dozen store brands spread across food, pharmacies, fashion, beauty and financial services. The company says it operates over 2,400 stores across Canada, such as Shoppers Drug Mart, Real Canadian Superstore, No Frills and more.

Click to play video: 'Consumers gear up for Loblaw boycott as petition for investigation gains traction'
Consumers gear up for Loblaw boycott as petition for investigation gains traction

And its PC Financial products, which includes a bank account and credit cards linked to Loblaw’s PC Rewards system, serves roughly three million customers.

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That vast network raises the challenge for the boycott movement starting in May, but those leading the charge say they are rising to it.

“I’m going to be closing my PC bank account,” said Emily Johnson, who created the Reddit group r/loblawsisoutofcontrol where the boycott began. “I’ve already moved all of my prescriptions to my local pharmacist as well.”

What else does Loblaw own?

Loblaw’s grocery division alone is expansive.

In addition to its namesake Loblaws grocery store and the aforementioned Real Canadian Superstore and No Frills, it also oversees Freshmart and its affiliates SuperValu, Shop Easy and Axep, Real Canadian Liquorstore.

The company also owns the Asian-focused T&T Supermarket, Zehrs, Valu-Mart, Provigo, No Name, Your Independent Grocer, City Market, Fortinos, Wholesale Club, Maxi, Extra Foods and Dominion Stores in Newfoundland and Labrador.

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The company’s PC Express online delivery service serves all of those brands.

Click to play video: 'Loblaws boycott picks up steam as resentment grows online'
Loblaws boycott picks up steam as resentment grows online

Its Joe Fresh fashion brand operates stand-alone stores as well as departments inside Real Canadian Superstore.

Loblaw also has a partnership with Esso and Mobil gas stations that allows customers to earn and redeem PC Optimum points, although as of 2017 the company no longer owns any of those gas stations directly.

In 2014, Loblaw acquired Shoppers Drug Mart, which operates over 1,300 locations alone and is known as Pharmaprix in Quebec. That company also operates Wellwise home health care centres, Simply Pharmacy and MediSystem Pharmacy, The Health Clinic walk-in and family health services, and Specialty Health Network patient supports.

In 2022, Loblaw announced Shoppers would acquire the Lifemark group of physiotherapy, massage therapy, chiropractic and rehabilitation clinics.

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The company even operates a prepaid wireless cellular service, PC Mobile, that runs on the Bell network. Earlier this month, it announced a new low-cost plan under the No Name brand.

Loblaw also owns and operates Maple Leaf Gardens, the former home arena of the Toronto Maple Leafs, which now houses the Mattamy Athletic Centre. The facility is home to Toronto Metropolitan University’s athletic program and PWHL Toronto, as well as the flagship Loblaws store.

Choice Properties, Loblaw’s real estate investment trust, owns and operates business parks, shopping centres and mixed-use retail and residential properties across the country, many of which are anchored by its grocery stores. Some of its business clients include Dollarama and GoodLife Fitness.

How are consumers impacted?

Boycott organizers have already acknowledged many Canadians will be unable to participate, given the lack of alternatives for groceries and other services in some communities.

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Industry Minister Francois-Philippe Champagne said on The West Block on Sunday that while he’s been trying to lure foreign grocers to Canada to increase competition, a lack of lease space is a key hurdle.

The r/loblawsisoutofcontrol page includes a link to AltGrocery.ca, which helps connect people to independent grocers in their community.

But the movement has also served as a reminder of how large Loblaw and other multi-faceted corporate grocers like Metro and Empire, which owns Sobeys and several other brands, have become.

Richard Powers, an associate professor at the University of Toronto’s Rotman School of Management, says those corporations have created an “economy of scale” that targets customer convenience, making it difficult for those customers to look elsewhere.

That has included setting up more stores in urban environments close to public transportation.

“Are people going to travel further to pick up the groceries or other services? That’s questionable,” he said in an interview. “I think this boycott will be short-lived.”

Loblaw president and CEO Per Bank said earlier in the week to the Canadian Press that 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.”

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Bank says he takes customer complaints personally, and if customers aren’t happy, “that’s something I want to fix.” He added that if one customer really dislikes Loblaw, “that’s one too many.”

Click to play video: 'Will the proposed Loblaw boycott reap any rewards?'
Will the proposed Loblaw boycott reap any rewards?

Loblaw claims 90 per cent of Canadians live within 10 kilometres of one of its stores.

Despite its diverse portfolio, Loblaw still makes the majority of its revenue from its grocery stores. Its 2023 earnings report showed that out of the $58.3 billion in retail sales the company earned throughout 2023, $41.2 billion — 70 per cent — came from food retail.

Loblaw’s first quarter financial results, released Wednesday as the boycott began, showed that 70-30 split has persisted into 2024.

Yet drug and pharmacy retail has routinely outpaced food sales in terms of year-over-year growth, which Loblaw has said is helping to drive its profits higher thanks to demand for cough and cold treatments and beauty products.

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Loblaw said its PC Financial services brought in $1.54 billion last year, a 15 per cent increase from 2022. In the first quarter of 2024, revenue from those services grew 10.7 per cent from the same period last year.

By comparison, its retail revenues grew by 5.1 per cent year-over-year between 2022 and 2023, and 4.4 per cent from the first quarter of 2023 to the same period this year.

Wednesday’s first-quarter results showed profit available to common Loblaw shareholders increased almost 10 per cent year over year to $459 million, or $1.47 per diluted share.

Johnson points to a list posted to the Reddit page outlining the ways Canadians can show “solidarity” with the boycott movement if they can’t untangle themselves from Loblaw’s various services.

Chief among those alternatives is a template letter people can use to write their local member of Parliament and voice their anger over rising prices at corporate grocers.

Johnson says people can also donate food or money to their local food bank, and to share news and information about the boycott on social media to ensure the movement continues to grow.

“You might not be able to to boycott, but other folks in your circle may be able to, and that’s a big way of encouraging solidarity among Canadians,” she said.

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With a file from The Canadian Press.

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