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Why Canadians see the biggest grocers as the villains of food inflation

Canadian consumers are increasingly pointing fingers at the major grocers as the culprits behind the surge in food prices, and the sentiment is particularly strong against grocery giant Loblaw. Despite Galen Weston stepping down as the president, his presence looms large in discussions, from memes to social media, and even a Reddit forum dedicated to the escalating cost of food in Canada.

Emily Johnson, a mental health and addictions worker, established the page r/loblawsisoutofcontrol in November. Initially created as a space for humor and venting, it exploded in popularity when Loblaw made headlines in January for reducing discounts on items nearing their sell-by date—a decision that was later reversed. The incident, however, sparked a surge in forum memberships, reaching almost 21,000.

The frustration evident on the Reddit forum reflects a broader sentiment among Canadians who find themselves grappling with rising food prices, reaching a peak of 11.4% before slightly easing over the past year. The focus of this dissatisfaction is now directed at the few companies dominating the grocery market, and experts believe these grocers face a significant challenge in regaining consumer trust.

The grocers defend their position by citing battles against tens of thousands of price increase requests from suppliers and efforts to mitigate the impact of inflation. Costco stands out as the exception, enjoying high trust among consumers according to the University of Victoria’s 2023 Gustavson Brand Trust Index. However, Loblaw ranks low on the list, sitting at 304th among over 400 brands, showcasing the challenge in demonstrating value amid reported high profits.

Rachel Thexton of Thexton Public Relations points out that maintaining consumer trust is crucial for grocers. Loblaw's decision to reduce discounts on soon-to-expire items may have seemed minor, but consumers perceived it as part of a more significant issue, especially in the wake of the bread price-fixing scandal.

Monica LaBarge, an assistant professor at Queen’s University, suggests that memories of the previous scandal contribute to Canadians’ growing skepticism. The discrepancy between grocers' profits and the challenges faced by Canadians, marked by rising food bank usage, fuels a sense of injustice among consumers.

Loblaw, in particular, has faced image problems since the onset of the COVID-19 pandemic, exacerbated by communication missteps. Thexton highlights the company’s poor communication and defensive tone in response to public backlash. The use of Galen Weston's image in advertisements, given his substantial compensation, further alienated consumers.

Efforts to reach out to Loblaw, as well as other major grocers, for comments on these issues have been met with limited response. Loblaw spokesperson Catherine Thomas emphasizes the challenges faced by retailers in the current inflationary environment but acknowledges the need for grocers to rebuild trust.

While there are signs of acknowledgment and corrective action from Loblaw, such as reversing discount reductions and appointing a new CEO, the path to rebuilding trust remains challenging. Initiatives like the “Hit of the Month” discount program are steps in the right direction, but the ultimate shift in sentiment will depend on the economy and how effectively grocers communicate and address consumer concerns.