Loblaw ending 50 per cent discounts on last-day sale items

Loblaw Companies Ltd. stores across Canada will no longer offer last-day sale items at a 50 per cent discount.

The grocery giant will be decreasing the discount on food items nearing their expiry dates to 30 per cent in all of its stores including, Loblaws, Zehrs, No Frills, and Valu-Mart.

Sylvain Charlebois, Agri-food Analytics Lab director at Dalhousie University in Halifax, says the change will impact many shoppers who look for the deals.

“We estimate that 19 to 20 per cent of Canadians actually do look for these products on a regular basis right now due to high food prices,” he says.

Loblaw confirmed the discount will decrease in an email to the Agri-food Analytics Lab.

“Historically, our stores offered a range of discounts from 30-50% on the ‘serve tonight’ type of products,” said Catherine Thomas, Loblaw’s vice-president of communications. “We’re now moving toward a more predictable and consistent offering, including more consistency with our competitors.”

Experts say the move will result in more profit for the grocery chain.

“Loblaw is a corporation, and their job is to maximize profit, so if they feel that they don’t need to go 50 per cent off on food that’s about to expire – that they can sell it for 30 per cent off to match competitions – they’re going to make more profit because people will probably buy it,” says retail analyst Bruce Winder.

However, Winder says it will not work well from a social perspective.

“I think these days people ask more from corporations than just to maximize their profits,” he says. “They’re going to be judged in the court of public opinion harshly because there’s probably a lot of people who are having a hard time financially right now.”

Charlebois says, to make matters worse, the corporation did not announce that it would be making the changes.

“They’re just doing it. I was the first one to ask them. They know it’s bad news for consumers, which is why they aren’t announcing anything,” he says. “It’s a missed opportunity to be transparent and honest, so it’s disappointing.”

While the news will disappoint many shoppers, Charlebois does not believe it will change where shoppers go to buy groceries, and the lack of options in Atlantic Canada does not help.

“You have to buy food and we have limited options in this region. It’s either Loblaws or Sobeys. A lot of people don’t have cars and they probably live close to one of those stores,” he says.

Winder also says the limited options for shoppers creates a monopoly in the marketplace.

“Where there’s less choice of grocer, or any company, the folks who sell there, the grocers in play there, have almost a monopolistic power, almost a monopoly there, or oligopoly, where it’s them and one other, so they have a lot more market power.”

Charlebois believes there is a price-fixing culture problem in the grocery industry, and now the public is seeing it with discounts.

“We saw it going back to the bread scandal eight years ago, and now we’re talking about discount fixing because basically Loblaws is admitting that it’s going to be following the same policy as its competition.”

Charlebois adds it is concerning that Loblaw is choosing to match prices with it competitors.

“In a free market you want companies to be creative, innovative and provide good deals and affordable prices to consumers. They are now copycats,” he says. “They are looking at Sobeys and Metro saying, ‘well, we’ll do the same thing,’ and for Atlantic Canada, this is probably the most underserved market in Canada, other than the north.”

A shopping cart is pictured inside an Atlantic Superstore.

CUSTOMERS REACT

CTV News spoke with a few shoppers who said they are surprised and disappointed to learn that the discount they had been receiving for certain items will be discontinued.

“It’s one more way grocery stores seem to be increasing their margins and make a few more bucks off us and that’s something they’ve been doing for many years. It’s not working so well for regular people like us,” said Eric Franson, as he carried a bag of his groceries in the Halifax area on Sunday.

Franson often picks up items that are discounted at 50 per cent.

“We’re patrons of the Superstore. It’s here in our neighbourhood so we come here fairly regularly and one of the first things we do is look the deli section, seafood section and see if we can find some items that are marked 50 per cent off and our fridge regularly has those items in there,” he says.

Franson adds the changes in discounts have been a topic of conversation with friends and at the dinner table.

“People are disappointed because they know how much grocery stores are making in profits right now and how much grocery inflation has been recently," he says.

Others say they found it strange the company didn’t announce the change.

“It’s shady. The things are going to expire anyway - try to bring it into the hands of people who actually need the food and rely on that 50 per cent discount,” says Erika Sjolander.

While shoppers may be upset, Winder says there are certain things they can do to address it.

“We vote with our wallets, so that’s our biggest power. Maybe talking to their local MPs and trying to put pressure on grocers to think about this,” he says.

The changes to discounted items will start after January 21 in Atlantic Canada, while the rest of the country will see them beginning Monday.