Loblaw’s Plans Expansion – Amid Soaring Food Prices

I simply couldn’t believe it. I had to read the headline three times to make sure I got it right. Loblaw’s supermarket chain is planning a huge expansion program, based on record 2023 profits. Even as millions of Canadians are struggling to afford decent food.

Loblaw’s and the other Big-5 Canadian grocery chains reported record profits last year. In spite of the worsening economic and social crises over soaring food prices. Sales were down, overall. But higher prices for individual products drove profits up…

What the Hell?

So, the biggest of the big chains is planning to use its excess profits to build more than 40 new stores across the country in a massive $2 billion expansion plan. Add those to the more than  2,500 stores the company already operates across the Great White North.

What in the name of all that’s holy are the Loblaw’s people thinking? They’re acting like they have a God-given right to charge whatever they like for food, and just let the millions of Canadians at the bottom of the economic ladder fall deeper and into the starvation zone. All while they ‘expand’.

If you can’t afford their wares, it appears they don’t give a damn about you: “Can’t afford hamburger? Let ’em eat steak!”

The grand plan

The plan will also see Loblaw’s-owned Shopper’s Drug Mart relocate or expand 10 of its stand-alone locations. And the brand will also renovate more than 700 others stores in a chain-wide image update.

The overall program is expected to generate some 7,500 new jobs across the country. Alas, the vast majority will be among the lowest-paying eschelons. And, if the current employment scheme at Loblaw’s is any indication, most of the lowest-paying jobs will be only part time. That lets the company avoid a lot of costs and administrative complications associated with full-time positions.

More low-income Canadians who can’t afford to shop where they work?

Not a great humanitarian

Galen Weston is hardly the great humanitarian – or economist – that Henry Ford was. Ford stated that, with the Model T, he wanted to make a car that the folks who built it could afford.

“In January 1914, Henry Ford started paying his auto workers a remarkable $5 a day,” an NPR article relates. “Doubling the average wage helped ensure a stable workforce and likely boosted sales since the workers could now afford to buy the cars they were making. It laid the foundation for an economy driven by consumer demand.”

That $5 a day in 1914 translates to about $120 a day, today.

Hey! Weston! How about a similar grand gesture on prices, to make your food products affordable for the millions who are struggling?

But wait…

I dug deeper and found another story in the Canadian Business Journal (CBJ), dated yesterday. It says Loblaw’s has also, quietly announced it will close 52 of its most-unprofitable stores over the next 12 months.

CBJ says that will result in an annual net gain in operating income for the company of about $40 million. It’s unclear how the closures will impact the plans to open new stores.

“It’s funny how grocers will brag about store openings, but will never talk about those they close,” comments Canada’s Food Guy, Dr. Sylvain Charlebois, Director of the Agri-Food Analytics Lab in Halifax.

And there’s more…

Charlebois also says he recalls Loblaw’s making a similar ‘expansion plan’ announcement not quite a year ago. And, apparently, nothing came of it.

April 14, 2023, Reuters carried a notice that Loblaw’s had said, “…it would spend C$2 billion (US)$1.5 billion) to expand its business in 2023 and create more than 6,000 new jobs in retail, supply chain, technology and construction in Canada.”

At that time, Reuters reported that the expansion plan would see Loblaw’s, “…open 38 new or relocated stores and renovate or convert nearly 600 others.” It appears the announcement this week is just an update on the numbers Loblaw’s announced last year.

This begs the question: Will the company actually move on its expansion plan this year?

A social responsibility

It’s time Loblaws, in particular – not to mention the other big grocers – stood up and accepted their greater social and economic responsibilities. They control the food supply. And they need to ensure that all Canadians can afford decent food. It’s as simple as that.

But they’ve obviously lost sight of that whole dimension of their existence.

To quote Loblaw’s official ‘mission statement’: