Canada’s second-richest man got there by selling… Groceries! Galen Weston Sr. was, until recently, head of Weston’s, which owns – among other things – the Loblaw’s Grocery empire and historic Maple Leaf Gardens in Toronto. In spite of what folks say, there is money in groceries!
Galen Weston Sr. (right) and Jr. (left) with Jr’s firstborn (centre). Photo taken
on the occasion of Jr.’s appointment as Chairman of Weston’s Ltd.
last year. Sr. stepped back from day-to-day operations.
Weston Sr. is worth a cool (US)$11.38 billion, as of the last accounting by Forbes magazine. he’s the latest in a long line of Weston family grocery millionaires. There have been in fact, nine Westons in the food business, starting with George Weston, son of a family of British immigrants who moved north from the U.S. in the early 19th Century. After apprenticing as a baker, he opened his own bakery on Sullivan St. in Toronto in 1882. He never looked back. By the turn of the century, his Model Bakery was producing more than 1,000,000 loaves of bread a month, and consuming 12,000,000 lb. / 5.45 million kg of Flour a year – easily Canada’s biggest baker.
From there, the family maintained his momentum, expanding product lines and buying up competitors and complementary businesses. Early in the new century, Weston’s got into the Biscuit and Cookie business. One innovation George introduced was the Biscuit Traveller – a travelling salesman who brought Weston’s Biscuits to retail stores in the hinterland on a prescribed route. This, of course, was long before the Weston family owned most of the supermarkets in the country! My step Dad’s Father was one of the last Biscuit Travellers, who serviced his Southwestern Ontario route on into the late 1950s. I treasure his copy of The Grocer’s Encyclopedia, a bible for the food sellers of yesteryear, handed down to me by Dad.
Today, Weston’s is into everything…
Weston’s owns some 20 supermarket chains across Canada and some 200 retail brands, Add to that foreign holdings including Holt Renfrew, Selfridges in the UK, along with an investment form that owns Associated British Foods and chi-chi Fortnum and Mason’s. The Weston companies employ more than 136,000 workers in Canada.
Weston’s / TNG
The next generation of Weston billionaires is Galen G Weston ()sometimes referred to as ‘Jr’). You know him as the face of the company for the past few years. He’s the boyish looking, mussy-haired, glasses-wearing guy in the sweater who invites you to try the latest Loblaw’s products in those homey TV commercials. Jr., himself, is worth an estimated (US)$8.5 billion, holds a Harvard Business School degree and will turn 45 later this year.
So why is food so expensive?
They say the grocery business – like the restaurant business – traditionally has a profit margin of only about 5 per cent. However, if you have enough stores and move enough product, you get to be a billionaire. So it is with Loblaw’s. So don’t sneer at we Galen in his $400 sweaters and $1.200 shoes. He and his family have earned them over the past 135 years. What ails grocery prices is, primarily, ballooning energy costs to transport food from across the world followed by increasing store overhead costs, much of which is comprised by staff wages and benefits. (Loblaw’s is unionized.)
The competition is fierce
Now, Galen Jr. went to bat for his customers last year, strong-arming his suppliers for price reductions at the wholesale level that he could pass on to us. Hooray for that. As a result, some brands were dropped from Loblaw’s ‘list’ when they refused to cut their prices. Booooo. But the leader in the market always has to be fist to innovate if it’s to remain the leader. Business insiders say Sobey’s supermarkets are breathing down Loblaw’s neck in some product categories on pricing. Other players (such as they are; most supermarkets in Canada are controlled by Loblaw’s) are in a tight race for survival.
Survival of the fattest…
That’s why we see deep discounts on certain basic foods and other grocery items almost regularly at all the supermarkets. You see $1.99 lb. / $4.37 kg Whole Chickens. Crazy-cheap Toilet Paper. Ground Beef specials every couple of weeks. Club Packs and Family Packs at really good prices.
If you see a price that seems too low to be true, it probably is. Supermarkets regularly put basic items everybody wants on ridiculously low discounts, just to get you into the store. The products they lure you in with are called ‘Loss Leaders’. Then, they use all manner of signage and strategic product placements to get you to buy more than probably you really need of other things. This has come down to a science, which is why so many supermarkets look so much alike inside.
We all win, with the Loss Leaders and Family Packs. But it takes a second fridge and/or freezer in the house to really cash in on savings. But, in the end, there can be only one winner in the mega-food business. Loblaw’s can literally starve the other guys out, if they want to, in a war of prices. it might be just a matter of time before one company – one family – controls all the food that’s available to you in supermarkets. That’s definitely not a good thing. Until then, let’s play the discounts game and cash in where we can.
~ Maggie J.