Loblaw Drops 50% Discounts on Expiring Items in Act of ‘Discount-Fixing’ [Op-Ed]

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With rising food prices, consumers seeking deals can benefit from food rescuing. According to a recent survey conducted by our Lab, nearly 20% of consumers now regularly purchase “last day of sale” deals at grocery stores, often referred to more broadly as “enjoy tonight” deals. Some of these discounts can be significant.

However, that is about to change if you are accustomed to seeing food products discounted at 50%. Starting on January 14th, Loblaw will cease to offer “last day of sale” items at a 50% discount. Although Loblaw did not immediately confirm this, the company eventually responded to an inquiry from Dalhousie’s Agri-Food Analytics Lab, confirming the policy change. Going forward, consumers will only find products discounted at 30% in all of Loblaw’s owned and operated stores. While this policy was already in effect in some parts of the country, it is now extended nationally. So, fellow shoppers, the days of 50% discounted products are behind us. It’s disappointing, but Loblaw’s explanation for discontinuing the 50% practice deserves attention. This is what Loblaw had to say:

“Historically, our stores offered discounts ranging from 30% to 50% on ‘serve tonight’ type products. We are now moving towards a more consistent and predictable pricing strategy, aligning ourselves with our competitors. Nevertheless, we will continue to provide a range of discounts through in-store promotions and flyers, as well as offering deep discounts on food nearing expiration through the Flashfood app.”

Loblaw’s response raises two important questions. Firstly, the company states that it is aligning its discounting approach with competitors. Generally, discount-matching policies at grocery stores are not inherently seen as anti-competitive. However, if multiple grocery stores adopt similar policies to maintain high prices, even on products close to expiration, it could potentially be considered anti-competitive behaviour.

Loblaw Lower Jarvis Street in Toronto (Image: Dustin Fuhs)

What is concerning is that Loblaw may not have considered the broader public’s perception of its discount-matching strategy. It likely never occurred to them that this move could raise suspicion. This is another example of how price-fixing or discount-matching practices are prevalent in the industry, and this issue extends beyond just Loblaw. The culture within the industry seems to have normalized the coordination of prices across competitors, without admitting to it, say akin to an individual alcoholic in denial about having a problem.

In a free market, the focus should be on finding innovative ways to remain competitive, rather than simply mirroring the competition. Canadians expect more from their grocers.

The other issue highlighted by Loblaw’s statement is the role of food-rescuing apps like Flashfood. Food Hero and Too Good To Go are also other very popular apps. The change in Loblaw’s discount policy is likely to steer more “last-day sale” enthusiasts towards these apps. It is highly unlikely that Loblaw’s decision to end 50% discounts will lead to more food waste; instead, the products will be sold through other channels. What Loblaw is doing, however, is preventing more consumers from focusing exclusively on discounted items at the periphery of the grocery store, where the more profitable fresh goods are located.

While Loblaw didn’t make a public announcement about this change, it would have been appreciated for them to have released something, anything. Although this change may be frustrating, the rationale behind reducing discounts is quite perplexing. This is an issue that the Competition Bureau should investigate. Otherwise, Canadians may continue to find similar pricing strategies in all major grocery stores. If this is not collusion, it certainly appears to be very close to it.

Once again, it’s important to emphasize that this issue extends beyond Loblaw; it is an industry-wide concern that needs to be addressed. The bread-price-fixing scandal was just the tip of the iceberg.

Sylvain Charlebois
Sylvain Charlebois
Dr. Sylvain Charlebois is Senior Director of the Agri-Foods Analytics Lab at Dalhousie University in Halifax. Also at Dalhousie, he is Professor in food distribution and policy in the Faculty of Agriculture. His current research interest lies in the broad area of food distribution, security and safety, and has published four books and many peer-reviewed journal articles in several publications. His research has been featured in a number of newspapers, including The Economist, the New York Times, the Boston Globe, the Wall Street Journal, Foreign Affairs, the Globe & Mail, the National Post and the Toronto Star.

9 COMMENTS

  1. Airlines seem to do it too. When AC sees others charging passengers fees for having checked baggage, which is basically a given with air travel, they decide ‘gee, we should get in on that!’ If you want me to fly on your airline and not the other one, don’t charge me an extra fee for checking my luggage! If Loblaws wants to be consistent with their discounts, do it as 50% on everything, don’t lower the discount because the others are only offering 30% off. I’m so ticked off at Cdns getting screwed and gouged at every turn in every industry in this country! When are governments going to do something about this?

  2. Maybe they should just have a secret meeting and price all their goods the same as their competitors and force us to pay crazy prices! Oh wait…. they already to that ….. bread anybody?

  3. Loblaws is morally bankrupt it’s one fiasco after another with them. I’m done shopping at any of their banners I have already used up all my loyalty points with them and that’s it never again! I hope we one day get some foreign grocery chains enter our market and shake things up!

  4. well, I went into Loblaws today before work to grab a few things and a few things was the word NO 50% instead 30% was plastered all over the breads the cakes nothing on the meats We all were flabbergasted and pissed off. Working next to the Loblaws we staff often whip through grab discounted foods due to the fact that we work that night shift. no savings today and we will not be returning to Loblaws or No Frills. it will be FARM BOY food BASICS metro and FRESCO or Walmart from now on .Very very disappointed in Loblaws!!!

  5. This is a highly cynical price gouging aimed at the low income customers (like myself) who came to rely on the near-expired discount to manage their food budget. As for “aligning with competitors” excuse this evidently points to Metro chain that has had 30% discount policy in place for years. At any rate, the food prices are ridiculously high and often do not reflect rise in costs.

  6. Don’t you think it’s paramount that Lobaws maximizes profits? I think even 30% discount is too generous. Why don’t they bring it down to 5% but only after it has well expired and is putrified? This was such a nice annoucement from a large, caring corporation at a time when many consumers are desperatling trying to financially survive. Thank you Loblaws! You are so kind.

  7. I made a point of going to a specific Loblaws in Kanata that still had the 50% off deals because they often had deli sandwiches and salads marked down. I’m too cheap to pay regular price for them (don’t think they’re worth it), so the 50% off deal was good. I talked to the girl slapping on the 30% stickers the other day and she just said “we were the only store still doing 50%, and they had just mandated a switch to 30%”. My reason for specifically going to that location had just vanished, because it was the only Loblaws left doing 50% in my end of the city. I was there again today and as I was walking out piles of 30% off food were going into the portables for transport to the food bank. People have slowed buying the now “less of a deal” discounts. Good for the food bank I guess. If they want to make a point of losing their competitive advantage then it may be time to spread my money around, like Farm Boy or Sobeys.

  8. As far as discounted meat goes…all the grocery stores take their almost expired meats and slap some spice crap on it so that you don’t see or smell that it has putrified, then jack the price even higher…then when that doesn’t sell, they offer a discount that brings it back to it’s original price. If I could do life again, I’d become a farmer and raise my own food!!!

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