Experts’ thought on Loblaw 50 percent discounts adjustment on last-day sale items

As consumers struggle with inflation and rising food prices, Canada’s largest supermarket chain is facing criticism for cutting discounts on its most affordable items.

Loblaw Companies Ltd. and their stores across Canada, which include Loblaws, No Frills, Valu-Mart and Zehrs, are adjusting their 50 per cent discount for last-day sale items — products that will expire the following day or soon after — to 30 per cent.

The news came out after Sylvain Charlebois, also known as “The Food Professor” on social media, posted on X asking Loblaw if they planned on adjusting their discounts.

“Hey @LoblawsON,” Charlebois wrote, “Heard a rumour. Starting Jan. 14, there could be a shift in the discount percentages for food items nearing their expiration date at stores like Zehrs Supermarket (from 50 to 30 per cent). Can you kindly confirm if this information is accurate?”

CTV News reached out to Loblaw for comment but received no response. However, they did respond to Charlebois, director of Agri-food Analytics Lab at Dalhousie University, saying they always offered a range of discounts between 30 and 50 per cent on their ‘serve tonight’ products.

“We’re now moving toward a more predictable and consistent offering, including more consistency with our competitors,” said Catherine Thomas, Loblaw’s vice-president of communications in an email to Charlebois.

Charlebois appeared on CTV News Channel Monday, saying he was most shocked by the rationale presented by Loblaw.

 

 

“The reason why they’re doing this is to align their policy with the competition,” Charlebois said. “They were admitting they were ‘discount-fixing’ their prices with the competition, when Canadians are expecting grocers to provide the best deals possible.”

George Minakakis, founder and CEO of Inception Retail Group, said he was surprised to learn that Loblaw was shrinking their last-day discounts, considering the grocery stores throw out the food they don’t sell.

“If you’re going to discount the food that you’ll throw out the following day, keep it at 50 per cent. You want to retain good will with your customers,” Minakakis told CTV News. “There’s no logic in their decision other than costs going up, but that means they’ve also gone up for their competition. Loblaw was a leader in providing discounted items for customers, so why would they join the rest of the pack?”

Minakakis, who has written three books on leadership and retail, said Loblaw had a significant opportunity to take a stand on social responsibility, considering the amount of media attention they and other grocery stores receive regarding their prices. However, Loblaw could be banking on consumers having short memories, he explains.

“There’s a marketing saying I’ve heard over the years from leading brands that companies ‘are training the customer,’ meaning they are teaching you to adapt to their practices. It seems like Loblaw making this move is their way of preparing customers for the future,” Minakakis said.

Ellen Roseman, an expert on personal finance and consumer issues, said customers may have to adjust their shopping habits and how they prepare their meals, but grocery stores should educate consumers when it comes to food items.

“I’m sure lots of people see the best-before date and throw items out either on the day or even a few days before. If you’re buying discounted food, say meat or bread, be sure to put it in the freezer and preserve it — or eat it right away, if you can,” Roseman said.

 

 

Roseman said consumers can buy grocery store memberships and find great deals, or look for “naturally imperfect” fruits and vegetables, which may have grown improperly and look unappetizing, but still taste the same and come at a discounted rate.

“Some food preparation has to be done. If you just go out shopping without a plan, it can be hard to get good value. But knowing what meals you want to cook and having a plan can help you in the long run,” she said.

Charlebois said the news is a missed opportunity for Loblaw, who earned over $44 billion in their first three quarters of 2023, to read the room.

“We’re in mid-January and a lot of consumers are in a tremendous amount of financial pressure. They’re receiving bills from the holidays, their mortgage payments are likely due, and when they shop at the grocery store, the prices aren’t dropping, so they need all the help they can get,” he said.

“Loblaw is saying ‘from now on, we’re going to protect margins, that’s more important than consumers.”

 

 

This article was reported by CTV News