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Comment: The missed opportunity of the Loblaw boycott

Many food prices have already been declining for weeks, rendering the movement somewhat misguided in achieving its purported goals.
The House of Commons committee studying food prices is urging Loblaw and Walmart to sign on to the grocery code of conduct or risk having it made law. The Loblaws flagship location on Carlton Street in Toronto on Thursday May 2, 2013. THE CANADIAN PRESS/Aaron Vincent Elkaim

A commentary by the senior director of the Agri-Food Analytics Lab at Dalhousie University of Halifax.

For months, we have heard rumblings of a Loblaw boycott organized by a clandestine group aiming to penalize grocers for their perceived profiteering.

The participants of this alleged boycott are calling for a reduction in food prices.

However, it’s important to note that many food prices have already been declining for weeks, rendering the movement somewhat misguided in achieving its purported goals.

Canadians justifiably feel frustrated and unprotected, and deserve a platform to be heard. While boycotts can be effective in the food sector, successful ones are logically sound and coherent.

This boycott targets Loblaw, Canada’s largest grocer, which controls less than a third of the market. Moreover, the boycott overlooks foreign competitors like Costco and Walmart, which are inexplicably exempt from the movement.

The arrival of both Walmart and Costco led to the consolidated grocery industry we have today. This selective targeting undermines the boycott’s credibility.

If the goal truly is to enhance food affordability, the boycott should encompass all major box stores, not just focus on one company.

Moreover, to truly address the issue at hand, the movement should support independent grocers who compete against these large players without any substantial backing.

Independent grocers often promote local foods and innovate across various food categories. Despite their contributions, these smaller entities seldom receive the recognition they deserve and are prevalent in communities nationwide.

Contrary to popular belief, smaller does not inherently mean more expensive, and the boycott could have highlighted the value of supporting independently owned and operated stores.

Furthermore, any Canadian who takes two minutes to read and assess the financial reports of top grocers such as Loblaw, Empire/Sobeys, and Metro will quickly realize that accusations of profiteering are largely unsubstantiated.

Not only have these companies seen same-store food sales growth generally below food inflation rates in recent quarters, but their gross margins — a true indicator of profiteering — have also remained stable for at least five years across all three corporations.

These firms are highly diversified, earning significant revenues from cosmetics, clothing, pharmaceuticals, financial services and real estate, benefiting from their varied market positions.

The boycott also raises concerns regarding its underlying motives. Some members of the group are targeting and threatening experts and academics who disagree with their stance, and have attacked journalists who report dissenting opinions, exhibiting almost cult-like behaviour.

This aggressive and confrontational approach is uncharacteristic of Canadian social movements and suggests a politically motivated campaign rather than a genuine grassroots effort.

Originally well-intentioned instigators seem to have lost control of the movement.

While Loblaw is not entirely without fault — particularly concerning its intense pressure on suppliers, which can stifle competition and reduce consumer choice — the boycott missed a crucial opportunity to educate Canadians about the real issues within the food industry and the role of major grocers like Loblaw.

We need a code of conduct to establish a level playing field for all grocers and food manufacturers in Canada. Instead, the boycott organizers opted for sensationalism and quick publicity, a disappointing and ineffective strategy that ultimately failed to address the systemic issues the boycott was purported to confront.