Some Central Alberta shoppers may be snubbing local Loblaw stores and joining Canada-wide boycott in protest of high food prices.
A post on the Red Deer thread on Reddit, the online forum where talks of the boycott began, reminded consumers that the boycott includes Canadian Superstore, Independent, No-Frills, Wholesale Club and Shoppers Drug Mart in the city.
"They say they won't lower prices but brag about record profits every year. The other shops are just as pricey. Doing this boycott will show how low our groceries can be and will make the others fall in line, at risk of being boycotted themselves," the post said.
A Reddit page created for Canadians to complain about Loblaw topped 67,000 members as of midday Thursday.
But a Red Deer Polytechnic economics instructor said the boycott will likely have little impact on the "Canadian grocery behemoth" which operates over 20 different store banners, with more than 2,400 stores in the grocery, apparel, and pharmacy sectors.
"While consumer boycotts can draw attention to important issues like food insecurity, the complexities of the grocery industry combined with broader economic inflationary pressures suggest that the impact of the May boycott on Loblaw-owned stores may be limited," said Quirk, at the Donald School of Business, Science and Computing.
"The Loblaw name isn’t particularly well-known in Red Deer, as it is in eastern Canada, which somewhat complicates the boycott."
He said while rising food prices have impacted everyone, food inflation is caused by several economic factors and cannot solely be blamed on retailers like Loblaw. Inflation has affected all aspects of the grocery supply chain, from rising costs with producers (such as energy and fertilizer costs) to increasing transportation costs (fuel, wage, and insurance costs).
"While retailers can absorb some of these costs, ultimately most of them are passed on to consumers in the form of higher prices. This is further exacerbated due to the limited number of competitors in the Canadian grocery market."
He said the boycott organizers’ demand that Loblaw sign onto the Grocery Code of Conduct is well-founded, as the Code’s goals are designed to promote transparency and fair dealings in the supply chain to ensure a better deal in-store for all players. But the demand that Loblaw lower prices due to record-breaking profitability is less sound.
"As Canada’s population and economy grow, one would expect retailers to report higher absolute profits; successful companies should be growing year after year. Loblaw’s profit margins have not moved much, indicating they are not earning extra profits on the backs of consumers."
He said most people would be surprised at how low the profit margins are in the grocery industry.
Loblaw chairman Galen Weston has pushed back on he called “misguided criticism” of the grocer and that allegations of profiteering by the grocers are untrue.
Weston said Loblaw is working hard to bring more value to customers through private label brands, hard discount stores, new promotions, and pushing back on “unjustified” price increases from manufacturers.
On Wednesday, Loblaw reported profits grew almost 10 per cent year-over-year to $459 million.
— with files from The Canadian Press