The many-tentacled conglomerate that controls Loblaw’s has revealed a statistic that can only lead the rest of the world to believe they’re sucking excess profits out of consumers’ pockets. Maple Leaf Foods Q2 earnings were WAY up…
Maple Leaf Foods is the manufacturing arm of the Weston food empire. And, like the supermarket arm – flagshipped by Loblaw’s – it has just reported disquietingly high ‘returns’ in its Q2 financial conference call with investors and analysts.
HOW much?
“Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization grew to $141 million, a 37 percent increase from the second quarter of last year,” the official news release trumpeted.
Loblaw’s profits for the first quarter of this year somehow managed to increase by almost 10 percent over the previous fiscal quarter (Q4 2023). Food price activists reacted with rage and disbelief.
Another log on the bonfire
That fire is burning brighter than it ever has before. Fueling it’s rage are repeated demonstrations that supermarkets and food processors are raking in excessive profits, in spite of mass unrest over high food costs.
The 85,000-plus member r/loblawsisoutofcontrol Reddit group has been protesting that store’s prices and policies for months. They started a boycott earlier this year, which they claimed as a victory. Albeit, a small one. The boycott continues.
In the midst of that upheaval, Loblaw’s finally settled its huge – and hugely embarrassing – bread price fixing case. They agreed to rebate customers a total of $500 million. Tens of thousands of Lob-law’s shoppers are deemed to have paid $1.50 per loaf too much for plain old white sliced bread over a period of 14 years. Canada Bread, which was owned then by Loblaw’s parent company, was fined $50 million. It was sold off as the scandal unfolded.
A possible upside?
As we reported last week, Loblaw’s has been making some moves to help consumers control their food costs. Just last week, we reported that the chain’s low-profile ‘Hits of the Month’ program had been offering special discounts on pantry ‘staples’ and customer favourites. The supermarket giant claims it saved shoppers more than $45 million since the program’s February inception.
Our overriding question was, “Why hadn’t we heard about the program before?”
The conspiracy theorists say, Loblaw’s wanted to be able to say they had done something about high food prices without masses of customers cashing in. If they had accorded the program a higher pro-file, or even reported results sooner than 6 months in (possibly bringing amplified attention to the program), the consumer response might have been much greater.
But they might have been risking losing out on profits of something like $450 million, rather than ‘just’ $45 million. That is, of course, if they had extended the good will to supply the higher demand. Retailers, like Fast Food purveyors, are notorious for offering ‘while supplies last’ and ‘limited-time’ deals to protect their financial picture.
‘Code of Conduct’
The Federal Government made a big deal out of the new Grocers’ Code of Conduct, mandated last fall after multiple parliamentary hearings on high food prices. All of the Big 5 supermarket chains have now signed on to the deal. But in the end, it will do little to help reduce food prices.
The long-debated provisions of the Code do seem to address issues that have caused problems along the food supply chain. But there are no terms or conditions to protect ordinary Canadians from unaffordable grocery prices. And that’s the issue that’s at the centre of the current controversy.
My take…
Millions of Canadians are still faced with hard decisions such as whether to pay the utility bills or feed their families. Recent surveys have revealed folks are downgrading their food choices, in some cases downgrading the quality of their diets. And others, at the bottom of the income pyramid, are skipping meals, and going hungry so their kids can eat.
I’ve said it before. But I’ve never been more adamant about it than I am now: Loblaw’s and the other members of the supermarket cartel needed to step up and take responsibility for the social and economic damage they’re causing by pushing for greater and greater profits, quarter after quarter.
The Big 5 literally own the supermarket industry, on which millions of folks rely to provide their sustenance. With ownership comes responsibility.
~ Maggie J.