Loblaw reports $13.58B in Q1 revenue, as Reddit group's boycott kicks off

Loblaw Companies re‐ ported $13.58 billion in first-quarter revenue - a 4.5 per cent increase from a year earlier - on Wednes‐ day 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 in‐ crease. 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 com‐ pany's drug retail sales under the Shoppers Drug Mart ban‐ ner 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 off‐ shoot brands, including No Frills, Provigo and City Market.

The Reddit group, called "Loblaws is out of control," currently has 62,000 mem‐ bers. It is not known how many people will participate in the boycott.

WATCH | How an online campaign to boycott Loblaw began:

Organizers want grocery code of conduct signed

Emily Johnson, a boycott organizer from Milton, Ont., told CBC News in an inter‐ view that its "end goal is to be reducing grocery prices and to be increasing food se‐ curity for all Canadians.

"We'd like to see commit‐ ments 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 indus‐ try-developed Grocery Code of Conduct, a set of proposed rules that will govern how major grocery companies in‐ teract with their suppliers.

LISTEN | What the leader of the Loblaws boy‐ cott hopes the group will achieve:

Loblaw and Walmart pre‐ viously 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 opti‐ mistic now than before that we can land an agreement on the code," he said during the company's earnings call.

Major grocers under in‐ tense scrutiny

Loblaw and other major grocers have come under in‐ tense scrutiny, both by politi‐ cians and consumers, for re‐ porting higher profits as some Canadians struggle to afford groceries.

February marked the first time since October 2021 that the inflation rate of food pur‐ chased from stores was lower than the overall infla‐ tion rate of all items, ac‐ cording to data from Statis‐ tics Canada.

While the pace of growth has taken a slower turn in re‐ cent 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 infla‐ tion," 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 'a‐ cutely 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 spokesper‐ son 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."

WATCH | Nova Scotians boycott some Loblawowned

stores:

David Soberman, a mar‐ keting professor at the Uni‐ versity of Toronto's Rotman School of Management, said those kinds of statements ring hollow with consumers who have watched their gro‐ cery bills go up.

"They think to themselves, 'Well, what that guy was say‐ ing and what I'm experienc‐ ing 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 Sober‐ man.