In the early days of the COVID-19 pandemic, when toilet paper traded like white gold and no one had any idea what the coming weeks and months would hold, Loblaws Galen Weston Jr., the company's CEO, appeared in Canadians' mailboxes. and tried to assure them that everything was okay. “Don’t worry,” Uncle Galen wrote. “There is no shortage of food or necessities.”
He announced that Loblaw stores will have dedicated shopping hours for seniors and people with disabilities so they don't have to endure crowds. He said grocery delivery fees will be reduced and fees will be eliminated for PC Express pickup orders. And he promised his stores would not change prices in response to the unprecedented demand for essential goods. “We will not take advantage of the coronavirus pandemic to raise prices on any items,” he promised.
It was a masterful piece of branding: empathetic, proactive, and strangely personal. The billionaire with a grocery empire whose button-down and sweater combo looks more expensive than most people's rent has somehow managed to understand the anxieties of ordinary Canadians and give them a sense of security that seems genuine. Gave.
Since then, Uncle Galen's face has changed to Rich Uncle Pennybag, and his grocery store is now the subject of a boycott in May for perceived exploitation of soaring food prices. Although Mr. Weston is no longer CEO of Loblaw, he remains chairman of the company's board and CEO of its parent company, making him the subject of much public ire. The Reddit page that started the boycott sarcastically thanks Mr. Weston for “keeping the prices of groceries up so I can get a big bonus check every year.”
Mr. Loblaw should be considered a great Canadian success story. The company is a family business that opened his first self-service grocery store in Toronto in 1919, and has since grown into a veritable behemoth with 220,000 employees across the United States. Loblaw operates premium and discount grocery brands, clothing brands, financial brands, Shoppers Drug Mart stores, and partners with Esso and Mobil gas stations. It is a ubiquitous feature of Canadians' daily lives. Loblaw is right there to pick up your gas, groceries, and prescriptions.
Perhaps that's part of the reason why it has become a target of public discontent over soaring food prices. (There's also the fact that Mr. Weston has been featuring himself in ads for years. Who will choose David Sobey of the Sobeys grocery empire out of the crowd before he passes away in 2023? ) Mr. Loblaw has grown and gotten so big that Mr. Weston is now the face of food inflation in this country. The company recorded first-quarter revenue of his $13.58 billion and quarterly profit of his $459 million, an increase of 9.8%. It also raised its quarterly dividend by 15% on the first day of the boycott in May, which may be seen as another twist in the knife for those more concerned with food security than portfolio performance.
But it would be naive to say that Loblaw is simply a victim of his own success. This was part of a plan to fix bread prices for more than 14 years. The company ended the $2 “hero pay” it provided to front-line grocery store workers after the first wave of the pandemic, even though the second wave of the virus was much larger. The company has resisted signing onto the grocery store code of conduct. The company recently changed its discount on food that is nearing its expiry date from 50 percent to 30 percent, but it only reversed its policy after public backlash.
Loblaw has a fiduciary duty to its shareholders to maximize profits, so from that perspective many of these moves (legal moves) are defensible and expected. But to the general public, they're disgusting, especially when Loblaw's brand is meant to care for struggling families trying to survive soaring food prices. If Loblaw's message was simply about convenience and quality, it might not feel like such a betrayal when Galen Weston is earning enough to buy a new yacht in 2024. When management professes to understand what it's like to ship something back in cashmere, Canadians, after doing the math in their heads, not only shelve it, but boycott it. .
Increasing competition in the grocery industry could keep overall prices down, but Loblaws has been able to grow as much as it has by acquiring smaller brands, building relationships with vendors and Examples include restrictive property management. – Acts as a barrier to the emergence of new grocery stores. So for now, Canadians can shop at one of the five major chains (or smaller independent chains), pay through their noses, and eat the cake that Canada's grocery dynasty has shrunken at high prices. I ended up shopping while complaining about the situation.
