Loblaw reports $13.58B in Q1 revenue, as Reddit group's boycott kicks off
Company says it's 'acutely aware' that it has to win customers' business each day
Loblaw Companies reported $13.58 billion in first-quarter revenue — a 4.5 per cent increase from a year earlier — on Wednesday morning, the same day that a group of frustrated shoppers said they would begin a month-long boycott of the grocery retailer.
The company's quarterly profit was $459 million, marking a 9.8 per cent increase. Earnings per share were $1.72 on an adjusted basis, an increase of 11 per cent, the company said. It hiked its quarterly dividends to shareholders by 15 per cent.
Retail segment sales rose 4.4 per cent to $13.29 billion. Food retail sales were up by 3.4 per cent, while the company's drug retail sales under the Shoppers Drug Mart banner increased by four per cent.
A group of shoppers who say they are fed up with the company's grocery prices said that as of Wednesday they would start boycotting the retailer's flagship Loblaws stores and its offshoot brands, including No Frills, Provigo and City Market.
The Reddit group, called "Loblaws is out of control," currently has 62,000 members. It is not known how many people will participate in the boycott.
Organizers want grocery code of conduct signed
Emily Johnson, a boycott organizer from Milton, Ont., told CBC News in an interview that its "end goal is to be reducing grocery prices and to be increasing food security for all Canadians.
"We'd like to see commitments to affordable pricing [and] price caps on essential items," she said.
Johnson said one of the group's primary demands is that Loblaw sign the industry-developed Grocery Code of Conduct, a set of proposed rules that will govern how major grocery companies interact with their suppliers.
Loblaw and Walmart previously indicated that they wouldn't sign an earlier draft of the voluntary code, saying it could lead to higher prices for Canadians.
However, Loblaw CEO Per Bank noted Wednesday that the tone of those discussions has changed. "I'm more optimistic now than before that we can land an agreement on the code," he said during the company's earnings call.
- Are you considering boycotting Loblaw stores for the month of May? Tell us why or why not in an email to [email protected].
Major grocers under intense scrutiny
Loblaw and other major grocers have come under intense scrutiny, both by politicians and consumers, for reporting higher profits as some Canadians struggle to afford groceries.
February marked the first time since October 2021 that the inflation rate of food purchased from stores was lower than the overall inflation rate of all items, according to data from Statistics Canada.
While the pace of growth has taken a slower turn in recent months, grocery prices are still rising.
During the earnings call, Loblaw chief financial officer Richard Dufresne said that its own inflation rate for food, or what it calls "internal inflation," was lower than the consumer price index (CPI) for food reported last month by Statistics Canada.
CBC News has not been able to independently verify this data.
Company says it's 'acutely aware' it has to win business
Responding to the online boycott, a company spokesperson told CBC News that Loblaw is "acutely aware" that it has to win its customers' business each day.
"The last few years have been tough for Canadians, and we continue to do what we can to combat inflation at our stores," the spokesperson said in a statement sent on Tuesday evening.
"Customers are noticing, with more visits in our stores and many commenting in the same Reddit groups that they're getting real value at our stores, often the best across the industry."
David Soberman, a marketing professor at the University of Toronto's Rotman School of Management, said those kinds of statements ring hollow with consumers who have watched their grocery bills go up.
"They think to themselves, 'Well, what that guy was saying and what I'm experiencing are two different things,'" he said.
Rather than talking about prices, "I think it'd be a lot more credible if they were to talk a little bit more about how they're trying to control costs, how they're working with manufacturers, farmers and producers to find out ways to try to stock their shelves and provide products more efficiently," said Soberman.
ABOUT THE AUTHOR
With files from Anis Heydari, Nisha Patel and Natalie Stechyson