46
votes
A Reddit-led boycott of Loblaws, one of Canadas largest grocers, begins today
Link information
This data is scraped automatically and may be incorrect.
- Title
- Loblaw reports $13.58B in Q1 revenue, as Reddit group's boycott kicks off | CBC News
- Published
- May 1 2024
- Word count
- 680 words
A subreddit, r/loblawsisoutofcontrol, was started late last year to create a place for people to vent about the sharply rising price of groceries. The group grew to include the possibility of grassroots activism and the idea of a boycott was floated. After a vote, the group decided to boycott Loblaws and all their subsidiaries, subbrands, etc for the month of May.
Some of the brands under boycott
Why are people putting time limits on their boycotts? That isn't how it's supposed to work. When the reddit thing happened they said 2 day boycott and reddits reaction was HA, wait it out. Then it changed to be a few more days, they still said wait it out. It was only when it turned into an indefinite blackout that reddit actually got scared and did something (shitty and terrible, but an actual reaction).
One month might dip their figures, but with a time limit, why would they do anything different?
A boycott only works when it's sustained and has a real affect on the company being boycotted. When they know it'll only be a few days, or a month, they have no reason to change what they're doing.
I would imagine that for short enough time spans (say, 2-5 day boycotts), the boycott could actually benefit the company - if interpreted correctly, it could provide valuable data (even if the data was "nothing changed" - then that's just even more of a reason to ignore the boycotter's stance)
That seems like even more of a reason to keep an indefinite boycott rather than setting a time limit on it.
Thanks for sharing. I live in the US and was not even aware of this brand beforehand
Are there not other grocers available in CA?
Loblaws is the largest and owns quite a few companies. We only have five big ones:
Walmart 8%.
Costco 9%.
Metro 11%.
Sobeys 20%.
Loblaw 28%.
Remarkable that Walmart has such a low market share in Canada. I expected a higher figure.
But honestly speaking, five companies sharing 76% of the market seems quite fair. That means another 24% are fragmented with smaller players. I've looked into market structures for groceries in the past, and I've noticed that many countries have a much more consolidated market structure.
Although I don't have the exact figures, for example, in Switzerland it would probably be 40% Migros, 40% Coop and the remaining 20% is split by Aldi, Lidl and small, local "Turkish" shops. The strong "duopoly" of Migros and Coop (and their various subsidiaries) results in almost zero competition and correspondingly ridiculous prices. Aldi and Lidl are mostly just present in industrial outskirt areas where only a fraction of people goes shopping, so their impact on lower prices is marginal.
The effects of such a duopoly become really apparent when you go shopping in nearby France, Germany or Italy, and your grocery bill amounts to half. And on top of that you get to reclaim another 20% VAT, as cross-border purchases are consumption tax free. So that's about a 60% saving before factoring in fuel and time commitment to go shopping a bit further away.
There are. Even in my town we have a Loblaws, Metro, Walmart, Food Basics, FreshCo, and RCS. And within a 20min drive we have a Costco, Fortinos, Cobs, Longo's, and a bunch of others.
However, worth noting that Sobeys, Longo's, FreshCo and a bunch of others are all owned by Empire; Fortinos, RCS, NoFrills, and bunch of others are all owned by Loblaws; And Super C, Food Basics, and a few others are owned by Metro... So there only appears to be healthy competition up here at the surface level, but the reality is that Loblaws, Empire, and Metro are basically an oligopoly, and there really isn't that much actual competition in the marketplace.
See: https://en.wikipedia.org/wiki/List_of_supermarket_chains_in_Canada
I wasn't going to join but after reading that they posted 10% profits in the last quarter and raised their dividends by 15% to stockholders, Im all in. In our city that means no shopping at Real Canadian Superstore, Shoppers Drug Mart or No Frills, all three of which we frequent at least once or twice a month.
The CEO of Loblaws tried to deflect blame by saying that there is a long chain of people who take profits before the food reaches their store, but was a bit tone deaf when suggesting that Loblaws isnt the major culprit. He pointed out that farmers profit and meat packers profit and transportation companies profit and wholesalers profit before Loblaws gets the product. True, Mr. CEO, but we only have access to the store, not the farmer and we know that he's not making record profits this year. We also know that if we pressure YOUR STORES, that you can then pressure the supply chain below you to lower their prices too.
Im hoping, just like r/wallstreetbets really shook up the market when it went all in to fight the huge whales shorting gamestop, that this boycott can actually have some power. There are 62,000 people in the sub as of this morning, which isn't small potatoes for a Canadian sub and this is the first time I recall anything like this actually making the national news with any kind of momentum.
The CEO is sweating, so it must be working. Never underestimate the power of a pissed off Canadian lol. We are well aware that we get bent over the barrel on MANY products and services, not the least of which is car prices, cell/internet pricing and groceries, because a lot of it is from America and just our exchange rate means we're automatically paying 20 - 25% more. And our housing prices are going ballistic and people are fed up with it.
If this gains momentum and Loblaws starts posting poor financials, it might actually scare the other big players into forcing prices down.
Edit: I also forgot that Loblaws was caught colluding on fixing the price of bread for years, and got 1.2M in government funding to buy new freezers for their stores, plus apparently they own the REIT that they pay all their own store rents to, so there are reasons to resent their profit margins.
I wouldn't cite wallstreetbets as a good example to follow here. They may have shaken up the market for a little bit, but it mostly just ended up with established players making bank off of retail.
Do you guys have to say sore-y every time you pass a Loblaws location?
I'm somewhat baffled by the idea. I feel like there's three scenarios:
There are other grocery stores, with cheaper prices than Loblaw owned grocery stores. In this case I'd hardly call it a boycott, just being smart. Organization or not, you should be choosing the more price competitive alternatives
There are other grocery stores, but they have more expensive prices. Seems like Loblaw shouldn't be the target in that case?
There no other grocery stores (realistically). In which case, I guess the protestors are going on hunger strike too.
Either way, after reading the sub I wouldn't have all that much hope for their goals.
While your first point can and does happen naturally, usually that's a gradual change in the customer base. With a boycott, businesses can see a significant drop in sales in one go. 62,000 admittedly isn't much given the scale of Loblaws, though I think the reporting on the boycott will increase that number.
Besides that though, one of the points of boycotts isn't just to deprive them of profit, but also draw attention to the problem and specific demands for change. Companies don't like bad publicity, and this already seems to be making the CEO change his tone about the proposed Grocery Code of Conduct. Which, based on one of the articles linked in this one, they were originally told to sign by the House of Commons since they and other grocery stores were already under heavy scrutiny from both the public and politicians.
So this boycott is adding another layer of pressure from the public on top of already existing pressure from politicians, which hopefully will chip away further at their resistance to change something about their operations.
Most of which are owned by Loblaws, Metro, or Empire. See my comment above.
But even still, I agree with you that this boycott is unlikely to accomplish much, other than getting our media and politicians attention, which might eventually result in some legislation that could help with the rising cost of food here. I wouldn't hold my breath over it though.
But it must be possible to avoid Loblaw owned stores, no? Or the boycott is impossible to begin with.
I just don’t think boycotting over price makes sense. Not buying from a store because you think it’s too expensive is like… just how buying things works. You don’t really need organization, and on the same token, it probably isn’t going to do a lot.
Boycotts are for externalities, like if Loblaw stomped on puppies, so you organize because stomping on puppies isn’t reflected in price. But price is price.
Where I live, just outside a major population center, yes. Where a lot of rural Canadians live, not so much. Loblaws is by far the biggest grocery company here and they are often people's only choice, whether they realize it or not, since Loblaws owns a bunch of other huge chains which only gives the appearance of competition.
And also worth noting is that Loblaws have done some shady shit that's gotten them a bunch of bad PR over the last few years (e.g. Bread price-fixing scandal, no longer discounting expiring items, etc), which is likely why they've been targeted for the boycott rather than the other two major grocery companies.
I don't want to debate about "greedflation" / food cost inflation in Canada or the effectiveness of boycotts though, since the issue is complicated, I'm honestly not informed enough on it to do so, and there is apparently tons of misinformation (from both sides) being spread about it too. That and I already said I agree with you that this boycott is probably not accomplishing much. ;)
I'd add a fourth:
Assuming comparable prices, if Loblaws is 10 minutes from your house and Metro is 12, you'd probably shop at Loblaws before Metro. But if you're participating in a boycott, you might decide to just walk/drive the extra few blocks to avoid Loblaws.
I think this point is far more relevant than the other three.
Where I live, I have a grocery store available two minutes away on foot. Prices are ridiculously high because this is one of the market leaders who gets to juice the lemon incessantly. But will I go shopping at the cheaper alternative, a 10 minute car ride away? Absolutely not, unless I'm doing a weekly big grocery shopping. Given that there's just two people in our household, that's arguably not even worthwhile as we cannot buy food for more than 2-3 days anyway, otherwise it just spoils.
So yeah, I'd love to boycott the shop next door, but it's way too convenient not to.
I hadn't heard of this. The only loblaws-owned store I regularly shop at is t&t; I may skip going there for the rest of the month out of solidarity, but it's not clear to me how much of a difference it makes? Groceries are expensive everywhere, and I haven't noticed its being especially worse at t&t.
Has there been a boycott of a large company in the last, say, fifty years which has actually worked?
Don't get me wrong, I am entirely on board with the concept of fuck these big companies who are screwing us over for their own profit but I don't think this will help. Loblaws have 29% of the Canadian grocery market, which is around ten million customers. Even if the entire subreddit of 62k boycotts them, that's still basically just a rounding error. Maybe they pick up a few more from the press coverage but it's never going to be enough to hurt them, and even if it is, it won't last. Look at how reddit didn't suffer from the last protest there. Look at how Nestlé aren't hurting from fifty years of the most famous boycott in the world.
I don't know what the answer is but I'm pretty sure what it isn't.
Sure, the results are just usually not really covered. An example would be the Bud Light boycott - their sales really did tank, board fired the CEO, backtracked on all the issues conservatives/MAGA wanted.
Harvard review case study on it: https://hbr.org/2024/03/lessons-from-the-bud-light-boycott-one-year-later
I don't recall that one even happening, but thanks. Looks like that is a pretty unusual result though.
edit: according to this article, 210 boycotts studied ended with the boycotters winning in 22% of cases. But the thing about this one is getting critical mass. When you're dealing with someone with multiple millions of customers, getting enough of them to come along is going to be so hard as to approach impossible. The demand "lower your prices or we'll shop elsewhere" will only work if "shop elsewhere" is more financially painful than "lower prices" and it's going to take a lot of people to shop elsewhere to do that. Per-user profit margins in food retail are pretty low, so they can afford to lose quite lot of custom.
If they're smart (but evil), they'll say they are going to change, conspicuously lower a some select prices (ideally while decreasing volume, so not hurting their profit) and say "look, we listened" and business will continue as before. Accountants will hide things a bit better for the next financial report. I doubt anything else will happen.
Am I too cynical, or just old enough to have seen this shit before?
No, their sub has a whopping 70k in it, and we all know only a fraction is going to commit. That’s beyond a drop in the bucket, it’s like an atom in the bucket.
If you read the sub I already get GameStop vibes. If nothing else being in loo loo land makes it impossible for the group to make rational decisions. I think they’re going to watch the undulations of Loblaw’s stock price and imagine themselves the fighters of a grand war and continuing their game of make believe for a while and not much else.
I think the bud light example is one that isn't applicable here.
The beer market is known to be highly fragmented, with customers having a lot of choices from big players like ABinBev, Heineken, Guinness etc., but also an endless amount of small, independent breweries. On top of that, there's an identically endless amount of choice regarding beer types. Boycotting one single company, with more or less one single brand of beer is ridiculously easy. (Note: I am aware that Bud Light isn't the only beer owned by the parent company, but you get my point.)
Now look at grocery shopping: people primarily go shopping where they feel it's the most convenient for them. That means: distance, time and shopping experience are big factors. Pricing of course is another one. But while competitors may be cheaper than your regular grocery store, they may be far less convenient. And on top of that, the grocery store market is way more fragmented. It's an uphill battle to get people to go shopping elsewhere. And downright impossible to get them to do that indefinitely.
tl;dr the Bud Light boycott worked out because it's a highly fragmented market. The market structure and convenience elements of grocery shopping are entirely different, so the success story of the Bud Light boycott is unlikely to repeat itself here.
Unfortunately, I think the bud light one is the only recent example I can think of. A perfect storm of a density of hostile customers combined with a change in consumption that was very easy for them to make.
I don't think that's the case here, a lot of people choose where to shop based on things like location or quality of produce. There is a cost to altering their behaviour so it's unlikely a critical mass of people will participate.
I’ve been boycotting loblaws for about 8 months now. I collected their PC points and would typically wait for $100 before redeeming. Out of the blue about $80 was redeemed from somewhere in Ontario. When contacting support there was issue with finding my account and ultimately denied reversing the redemption.
Fine by me. I’m better off without them. 🖕
Just noted that 19 hours ago r/loblawsisoutofcontrol had 60,000 users, now its
66,000(edit: its 71,000 now, 45 hours later). And that's just reddit, Im sure there are others who are boycotting who have heard about on the news or other socials. For Canadians, who are notoriously apathetic about our high prices, its not insignificant.We're a single income household with a new child at the moment, so as much as I hate it and would love to shop at the local co-op chain to stick it to Loblaws, the convenience and price is pretty unmatched at the other outlet.
It sucks, because Superstore is awful.
We open on a long stretch of road on a Sasketchewan prairie. The sun shines hot and direct on a rapeflower field, making waves in a breeze. Suddenly, the waves become more turbulent, as a three trailered tractor blasts by. Written on the side of the trailers, Loblaws! The bestest foods!
Camera follows the trailer for a small piece, then picks up a disturbence in the field, something quickly devouring and lowering the plants. Camera tracks toward the disturbance. Is a 1962 Chevy c3100 lifted with over size towers, shiny chrome stacks, and a bunch of heavy duty hardware and chains in the bed. Inside, a ripped Rick Moranis scowls and twists and stalk of flower in his mouth. Next to him sits Penelope Cruz. Her gaze drifts toward Moranis and she gives a half knowing smile to the camera.
Cut to another disturbance on the other side of the road. Camera moves in. This time it's a modified jaguar xke with a supercharger towering over the hood. Camera tracks in to Sam Jones sitting in the passenger seat, cradling a .50 cal chain fed machine gun and stupid grin plastered all across his face. Driving the car is Matt Frewer, dressed in leather and chains, with chrome mirrored aviators.
The xke bursts on to the road fishtailing in front of the big rig which blows its horns but doesn't slow down. Frewer picks up a walkie talkie and says "Ok Bluto, we're in position." Camera cuts back to the c3100, which jumps over a ditch, does a 180 in the air, and lands driving high speed in reverse right behind the rig. Penelope Cruz jumps out of the cab, climbs over the bed and jumps onto the back door of the rig while Moranis smiles and nods. Some freshly welded cnc hardware marvel extends from the rear of the truck, Cruz straddles, gently sticks out her tongue, gives a wiggle and it attaches to the axles under the trailer. She looks back at Jones and winks.
Moranis hollers into the walkietalkie "Go Time!" Jones punches the roof of the XKE which flies off and camera cuts to cruz and Moranis watching it fly away. Jones gets up, and aim thes .50 cal at the rear of the semi cab and starts blasting away. The cab and trailer separate, and cab somersaults off into the field. Camera jockeys to Moranis and cruz shifting gears and hooting and hollering. Jones shoots the gun in the air.
Cut to a unhoused encampment in Toronot. Moranix, Cruz, Jones and Frewer are all distributing frozen chickens to dirty families dressed in rags . . .
I thought Loblaw was a last name made up for the name Bob Loblaw' Law Blog. I'd never heard it as a last name before.
Redditors couldn't even boycott their own website. Best of luck to them on that.