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Loblaw Marketing | The Press

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Some expressions come with a lot of well-known meanings. “It’s just a marketing stunt” is certainly part of the lot.

There is always a bit of mistrust in the tone and disillusionment in the eyes of those who say “it’s just a marketing stunt! “. And Monday, you could clearly feel that sentiment on social media about the announcement of the owner of the Maxi, Provigo and Pharmaprix chains, the Ontario giant Loblaw.

The company will freeze the price of its 1,500 No Name branded products until the end of January. Official reason: to help consumers escape the inflationary spiral.

“It’s just a marketing stunt! “, quickly rose up the most cynical.

What do they mean, exactly? That this is a booby trap? That these freezes will not really take place? That they are announced for reasons other than those given? That their effect will be minimal for consumers’ finances? A bit of all that?

We would be naive to give the good Lord without confession to companies. If they were all perfect, the Competition Bureau – responsible for unearthing fraud, collusion and deceptive practices – would be virtually irrelevant. His usefulness was proven in 2018 when he revealed that seven companies (including Loblaw, Sobeys and Metro) had participated in a criminal plot to fix the price of bread for 15 years.

Are food companies plotting other schemes to the detriment of consumers? Many Canadians believe they artificially inflate prices, causing the inflation that has plagued us for a year.

In July, an investigation by the Toronto Star1 concluded that supermarkets are increasing their prices “faster than necessary” and that they “benefit from inflation”. Five economists were invited to analyze the financial statements of Loblaw, Sobeys (IGA) and Metro. If their profit margins had remained the same as in 2019, Canadians would have saved $1.4 billion on their grocery bill in 2021, the Toronto daily concluded.

Food prices are also raising questions on Parliament Hill in Ottawa. On Monday, elected officials voted unanimously in favor of an NDP motion calling on the government to establish a “strategy to fight greed” in grocery chains.

Also at the request of the NDP, the Standing Committee on Agriculture and Agri-Food agreed (on October 5) to investigate the price of the grocery basket. CEOs of major supermarket chains, executives, food producers and trade unions will be called to testify. The guest list is not yet known.

After those two wins, New Democrats took credit for Loblaw’s announcement⁠2.

Maybe Loblaw smelled like hot soup and wanted to look good under the circumstances. But other voices have been raised in recent weeks in favor of a certain price freeze, including mine.⁠3 and that of Sylvain Charlebois, director of the Laboratory of Analytical Sciences in Agrifood at Dalhousie University. If it’s done elsewhere in the world, why not here?

Back to the “marketing stunt”. Yes, it is indeed about marketing. But that doesn’t mean cheating! The university curriculum does not contain the teaching of the top 100 tricks to scam customers. Marketing often gets a bad rap for lamentable overzealousness, but that doesn’t make all ads suspect.

Let’s be honest: Loblaw will honor its freeze promise. Its yellow products have never been scrutinized so much. If a price had to go up, the grocer would get caught on the spot. Can you imagine the damage to his reputation? In short, this announcement brings a certain peace of mind to those who are struggling to balance their budget.

The problem with this ad is that it’s unclear how much it will actually save consumers.

First, we are talking about 1,500 products out of more than 20,000 in a supermarket. There’s no No Name milk, no chicken thighs, no broccoli. This limits the scope of the measurement.

In addition, the frost will be short-lived. Would the price of food from this brand have jumped during this period? Mystery. Over the past three months, food inflation has totaled 2.7%. It doesn’t make a big difference on a bag of oatmeal or the jar of compote.

Not to mention that we will soon be in a “blackout” period. From November to February, it is generally agreed between suppliers and grocers that prices will not move. In this context, one wonders whether Monday’s announcement will really change anything for customers.

Another key question concerns the financing of this highly publicized freeze which hopefully does not come on the backs of the suppliers. Loblaw swears its profit margin will suffer, spokeswoman Johanne Héroux told me.

One thing is certain, the grocer has the merit of having been the first major company in the food sector to show a little empathy towards the consumer and to talk to him about inflation. And its president Galen Weston has shown himself to be close to the concerns of his clients. This could create a consumer-friendly ripple effect.



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