The Real Atlantic Superstore and its parent company, Loblaw, ended a price freeze on its No Name products this week. This price freeze, if you listen to Superstore, was a way to benevolently do some good.
When the price freeze started in October of 2022 people were upset. In October people believed that Loblaws was just doing a publicity stunt. Now in February 2023 people are angry, beliving that Loblaw is profiteering.
It’s not shocking that people struggling to afford groceries would be upset that one of three Canadian companies in a grocery oligopoly that’s making record profits has decided to make food more expensive again.
And the company must have known that ending the price freeze would generate bad press. Mary MacIsaac, senior vice-president of marketing and Loblaw brands, put out a memo to employees attempting to make them feel better about working for Loblaw. Although the memo may have missed the mark. The employee who sent it to The Coast characterized it as “More BS.”
The memo, and Loblaw’s aggressive Twitter PR campaign, made a lot of claims that all seem to hinge on us, the food eaters, believing that one of Canada’s most powerful companies is doing everything it can to help us, instead of doing everything it can to get more and more of our money and more and more powerful. The Coast called Loblaw to speak with Mary about the memo, but since we have not heard back, the memo will have to speak for itself.
“[Customers] see the price of food on the shelves and understandably get frustrated at the supermarkets. In reality, we’re doing what we can to help,” MacIsaac writes in the More BS Memo.
In reality, they are not doing what they can to help. To find out how much more Loblaw could be doing, we’re going to break down the Loblaw PR machine’s claims to see how much is fact and how much is fiction.
“Food prices are particularly concerning, and as the last step in the food supply chain, it can be easy for people to blame grocers,” writes MacIsaac. But hold up, Mary—is Loblaw the last step in the food supply chain? Isn’t George Weston Limited owned by Loblaw and the Weston family? And don’t they control the brands President's Choice, No Name and Joe Fresh, in addition to bakery brands Wonder, Country Harvest, D'Italiano, Ready Bake and Gadoua? Loblaw is the last step in the food supply chain, but it’s a lot of other steps in the food supply chain, too.
“When the freeze was announced, incredibly, there was pushback,” reads the More BS Memo. “Others called it a marketing stunt.” And it was called a marketing stunt because it was. On Oct. 17, 2022 one of the final bosses of capitalism himself, Galen Weston Jr., put out a press release trying to garner attention to his “good deed.” If the final bosses of capitalism genuinely cared about their customers’ well-being, the end date of a program that helps that well-being would be when the program was no longer needed. Ending the program now just leaves a bigger gap in grocery bills, because food is still insanely expensive. And if it wasn’t a marketing stunt, just change the price in your flyer, change the price on the shelves and keep it there. But they didn’t. They didn’t want to do a good thing without people noticing, so they made noise about it, so we’d believe they care about us. But they don’t care, because we know, and they know, that our stomachs empty a hell of a lot faster than Weston’s bank account. They need us to feel good about our powerlessness in the face of exploitation.
“I want you to know the reality - our customers greatly appreciated the price freeze.”
This is kind of true, Mary! We’re broke, and we did enjoy being able to afford food for a few months.
“While prices were frozen, costs were not. In 2022, we dealt with a record number of supplier cost increases, and so far this year that trend has continued. During the price freeze, we absorbed tens of millions in supplier cost increases for customers. Now, we’re going to hold prices as flat as we can. But that won’t always be possible,” reads the More BS Memo.
This paragraph has a lot to break down.
While it may be true Lobaw did “deal with” (whatever that means) a record number of supplier increases, they have a lot of control over supplier prices. As The Coast has reported before, Superstore can reject supplier price increases. While it’s possible Loblaw did, in fact, eat the price difference, it’s also possible its suppliers absorbed the cost. And that can have a huge impact on Lobaw’s smaller, local suppliers. Rejecting a price increase for Viveau, a Halifax-based fizzy water company, put the final nail in Viveau’s coffin—killing a local company. Viveau, it should be noted, competed with a Loblaw brand of fizzy water. Should we be concerned that our grocers can kill local businesses in favour of their own in-house brand? If only there were a board game from 1935 that held a dire warning about this kind of business practice. Nah, surely it’ll be fine.
“Since the freeze was introduced, No Name sales skyrocketed and led to increased traffic and new customers looking for value.” Two things: 1. This is the sign of a successful marketing campaign, and 2. Mary, we’ve been over this. We’re broke. Of course we flocked to cheap groceries. What a weird coincidence that a “not-marketing” campaign is touted as a successful marketing campaign. It’s surely a coincidence that this move also happened to increase Loblaw’s market share in the discount food section of the grocery store. What a fortunate coincidence for Loblaw that a not-marketing campaign led to market consolidation.
“We’ll be actively encouraging Canadians to Switch and Save, by making sure the average family knows they can save thousands by switching to no name.”
Translation: This is an opportunity for Loblaw to get people to spend more money in Loblaw stores and get them to bank with Loblaw. Mmmmmmm, tasty, tasty market consolidation.
“We’ll also continue to provide even more savings through PC Optimum points, while demonstrating to customers the real power that comes from taking full advantage of PCO.”
Mary, come on now. We both know that when things are discounted through the PC Optimum program, that cost is passed on to Loblaw suppliers. Local businesses and other Loblaw suppliers will be the ones paying for this increase in savings. Not only that, but the PC Optimum program is a huge data mining operation. To be clear, what the More BS Memo is saying, without the marketing jargon, is this: Local businesses will be hurt financially, so Loblaw can make money off our data, resulting in more market consolidation for Loblaw.
It must be a coincidence that everything Loblaw is doing can also lead to market consolidation. What benevolent grocery overlords we have.
On top of this, Loblaw has been on a tear on social media, parroting talking points from this memo, as seen below:
There is a very real difference between a cost freeze from suppliers and a price freeze to customers. Some grocers talked about saving people money. Others pretended to copy our freeze. We actually did it.
— Loblaw Companies (@loblawco) February 1, 2023
There is a real difference that Loblaw is obfuscating with this tweet, but that’s been covered above.
We get it. It’s easy to blame grocers for higher grocery prices. But on a $100 grocery bill, our profit is less than $4.
— Loblaw Companies (@loblawco) February 1, 2023
But if Loblaw cared about us as much as it claims, it would use its pharmacy profits to subsidize groceries and take a hit to its bottom line. But! They! Are! Not!
Food inflation is a global issue. Suppliers are raising costs and it’s costing us billions more to put food on our shelves. This is where higher prices come from.
— Loblaw Companies (@loblawco) January 31, 2023
This is not true, as covered above.
No Name has been described as the biggest price freeze in the world, and we’re not done cutting grocery bills. This year, the average family will save thousands of dollars this year if they pick No Name over the national brands.
— Loblaw Companies (@loblawco) January 31, 2023
Save money by helping Loblaw get a monopoly! Very helpful.
Very interesting comms strategy unfolding in real time. Looks like as of 10 a.m. ET today, the @loblawco is scouring Twitter for any mention of the price freeze on No Name products coming to an end today.
— Andrew Joe Potter (@AndrewJoePotter) January 31, 2023
Quite a spree they're on, too. Can't see this changing any sentiment! pic.twitter.com/B9klr4rtIt
What can be done about it? Not much, to be honest. The people who are supposed to protect us, just aren’t. Prime minister Justin Trudeau gave Loblaw $12 million of your money as Loblaw was price-fixing your groceries. And instead of making Loblaw pay back the money it stole from us, Loblaw was instead allowed to give us gift cards—gift cards—that could only be spent at Loblaw stores.
Fun fact about those gift cards: They also allowed Loblaw to mine our data. Why did Loblaw need to mine our data? Because they wanted to make sure we weren’t doing fraud with our price-fixing hush money.
To be absolutely crystal clear: The “penalty” for Loblaw price-fixing your groceries was that Loblaw was forced to give itself its own money back, and mine our data in the process.
If you are reading this and are in a position of power in government, or in the C-suite of Loblaw, you need to take a hard look in the mirror and ask yourself a very serious question.
Because right now, you are.
