Loblaws discount decision reversal shows consumers still have power: professor

In a swift reversal prompted by widespread public backlash, Loblaw Companies Limited is maintaining its 50 per cent discount on soon-to-expire food products.

“Don’t take consumers for granted or you’ll have to pay for it,” said Sylvain Charlebois, director of Agri-Food Lab Analytics at Dalhousie University.

The decision to eliminate the discount had sparked a week of intense criticism from consumers and ignited broader conversation about corporate responsibility during challenging economic times.

“This was very much about food affordability. It was about buying food. They picked an awful time to do it and that’s what they heard this week,” said Charlebois.

Loblaw planned to reduce its 50 per cent discount on products near their expiry dates across Canada, with 30 per cent being the new normal. The company said it was a move toward more predictable and consistent pricing – in line with its competitors. However, now the 50 per cent stickers are here to stay.

“We saw a misstep by Loblaw’s this week and you know to their credit they backed off because they saw a reaction, and they’re in business so you want to keep your customers happy. That’s the fundamental rule of business,” said Ed McHugh, business professor at Nova Scotia Community College.

However, the decision has sparked broader conversation about the responsibility of grocery giants and whether others will follow suit.

“People are going to start looking at Metro and Sobeys and ask them, as well, ‘So what are (you) going to be doing now to help us out?’ I mean everyone needs help,” said Charlebois.

McHugh does not believe this will cause Canadian grocers to have competitive discount pricing. “I don’t see it because they control such a large share of the distribution channel. I don’t think things are going to get immensely better. I think things will just go along as they have been.”

He said this showcases the growing influence shoppers have in shaping corporate decisions and that will impact businesses in the future.

“I think this is a lesson for all of them. You know, sometimes when you have such a big share of the market, you think you can almost do what you want to do. I think this proved here that, in this demand and supply economy we have, the consumer still has power.”

Charlebois said more competition is needed across Canada.

“As soon as you allow companies to have tremendous amount of power in the marketplace like Loblaw and Walmart, independent grocers don’t stand a chance.”