Loblaws price freeze on No Name brand items nothing but a publicity stunt, critics say
Loblaws #Loblaws
A way to help Canadians with soaring household food bills, or nothing more than a publicity stunt?
For anti-poverty activists, politicians and ordinary Canadians on social media, it was undisputably the latter, after Loblaws announced Monday it was freezing prices on its No Name brand products until Jan. 31, 2023.
“This definitely feels like a marketing play. It’s not really going to make a material difference because food prices are already so high,” said Leila Sarangi, national director of Campaign 2000, a coalition of groups working to end child and family poverty.
“For people on low incomes, people on fixed incomes, the working poor, people with disabilities who are on disability programs, kids living in poverty, they’re not really going to be benefiting from this feel-good announcement,” said Sarangi.
Federal NDP Leader Jagmeet Singh says the price freeze is proof of his party’s claim that retailers have more control over food prices than they’ve been admitting.
“The pressure is working. The mask is off — grocery CEOs have always had the power to freeze prices. With your pressure, we’ve exposed greedflation and forced them to act. But, it’s still not enough. I’m going to keep fighting until you can get fair food prices,” Singh tweeted before an NDP motion on food inflation was passed unanimously in the House of Commons. (A motion isn’t a piece of legislation and thus has no legal effect).
Loblaw Cos. Ltd. spokesperson Catherine Thomas said in an emailed statement that the price freeze on roughly 1,500 No Name brand products will give Canadians a break as inflation continues to rise.
“Today’s price freeze will mean Canadians can expect more predictability from their grocery bill. In addition, in the weeks ahead, we’ll continue to lower prices (on both no name and other products) through PC Optimum, in our flyer, and across our stores, all designed to provide immediate relief from escalating food costs,” said Thomas.
A spokesperson for Metro Inc., however, said the price freeze is something that happens every year, anyway.
“It is an industry practice to have a price freeze from Nov. 1 to Feb. 5 for all private label and national brand grocery products and this will be the case in all of Metro’s banners (in Ontario, Metro, Food Basics, Adonis). There may be a few price increases received prior to Oct. 31 that will appear on the shelf, but no price increases thereafter,” said Marie-Claude Bacon in an emailed statement.
A spokesperson from Empire Co. Ltd., which controls Sobeys, Longo’s and Farm Boy, didn’t reply to a request for comment.
Thomas didn’t respond to questions about how much No Name prices have risen in the last two years, nor why Loblaws didn’t expand the price freeze to the other products on its shelves, including its flagship President’s Choice brand.
Food industry analyst Sylvain Charlebois said it’s no mystery why the price freeze wasn’t broader: The PC product line is one of Loblaws’ most vital profit centres.
“They are going to fight for that one with everything they’ve got. The last thing they want to do is even hint that it’s a discount brand,” said Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University.
Charlebois agreed that there’s a definite marketing element to Loblaws’ announcement, as it came just two days ahead of September inflation data being announced by Statistics Canada.
“Now, when the inflation numbers come out and people are hammering retailers saying, ‘What have you done to help?’ Loblaws will have an answer,” said Charlebois, who added that freezing prices on house brands, including No Name and PC, is easier for retailers to do than with other brands.
“They’ve got much more control over the economics and supply chain of house brands than they do with anything else. Think about what happens if you’re a supplier. Your only customer, or your biggest customer comes up to you and says, ‘We’re freezing prices, so you’re going to have to help us do that.’ What’s a supplier going to do?” said Charlebois.
Pedro Antunes, chief economist at the Conference Board of Canada, said he expects food inflation to continue to be higher than the main “headline” consumer price index being released on Wednesday.
“I’m a bit worried about the September number. Most commodity prices continued to drop in September, but that takes a bit of time before we see it getting into consumer prices. Food price is an example, they will likely remain hotter than overall inflation in September,” said Antunes, who predicts headline inflation will remain close to the seven per cent seen in August, when food inflation soared to a 41-year high of 10.9 per cent.
BMO chief economist Doug Porter said the bank’s forecast is for a 6.8 per cent headline number, but expects food inflation will be higher than that.
“Food inflation is expected to remain high in the month, but we will be looking for signs that it could be cresting (albeit at a still very fast rate),” said Porter. “The pressure on food costs is multi-tiered, but aggravated by ongoing drought in the U.S. plains, the war in Ukraine, high energy costs, among other things. I would point out that U.S. grocery inflation is even stronger than ours, so this is a widespread problem.”
On social media, Canadians scoffed at the No Name price freeze.
“This is a PR stunt that is attempting to bamboozle us into forgetting that Galen Weston is an oligarch,” tweeted Julie S. Lalonde.
“Raises the prices to record high levels, gouging consumers, and then freeze prices at those record high levels … Is Galen Weston expecting a gold star? #cdnpoli #greedflation #Loblaws,” tweeted El Canaco.
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