Loblaw fights price criticism
Grocer says suppliers, manufacturers to blame for food inflation
Loblaw wants to set the record straight as a war of words between angry consumers and Canada’s largest supermarket chain over soaring food prices heats up on social media.
Amid growing criticism the company is price gouging, Loblaw’s social media team has taken to Twitter insisting they are not at fault, instead pointing the finger of blame at suppliers and manufacturers over price hikes. “We may be the face of food inflation but we are certainly not the cause. Food prices are higher in our stores simply because the manufacturers who make the products are charging more for them,” a tweet from the company account said last week.
“Food inflation is a global issue. Suppliers are raising costs and it’s costing us billions more to put food on our shelves. This is where higher prices come from,” another tweet said, directly hitting back at a twitter user criticizing the food retailer of “gas lighting” consumers.
Consumers over the last several weeks have taken to social media to criticize the food retailer for its prices and record profits as Canadians grapple with the worst inflation the country has seen in decades.
But a wave of anger was ignited when Loblaw confirmed it was ending its holiday price-freeze on No Name products on Jan. 31, and the company has spared no effort in responding directly to dozens of irate — and sometimes sarcastic — Twitter posts.
“Wow thanks Loblaws a whole price freeze for … less than a season. Very useful,” twitter user Kyle Hutton wrote the day the price-freeze was set to end.
“We froze prices to help customers at a time they needed it most and we did something to fight inflation. It meant something to Canadians,” the company said in a direct response to Hutton.
Price freezing over the holiday season, from November to February, is a common industry practice.
When Loblaw in October announced it would freeze prices on 1,500 No Name products until the end of January, it was panned as a PR stunt and seen as evidence that retailers have more control over food prices than they’re acknowledging.
“This makes me hate @loblawco more than ever. The whole claim of anything novel in this price freeze was a lie to begin with,” a twitter user said, replying to Loblaw’s recent spate of tweets.
“Clapping back on Twitter doesn’t change anyone’s minds, it just shows how out-of-touch they are,” another tweet said.
In one of the more controversial tweets from Loblaw, the company attempted to downplay how much profit it was making off grocery bills, despite evidence that Loblaw posted its biggest gross profit margin yet — 31.4 per cent — in the second quarter of 2022.
“It’s easy to blame grocers for higher grocery prices. But on a $100 grocery bill, our profit is less than $4,” Loblaw said in a tweet.
The tweet prompted several twitter users to lambast the company, its PR team and CEO of Loblaws, Galen Weston, one of Canada’s top 100 highest earning CEOs in 2021 in a recent report.
“Show us your CEO’s house,” one twitter user said in response.
“Damn didn’t know they teach gaslighting in PR school,” one tweet said.
When asked why Loblaw thought it was necessary to respond to complaints on Twitter, the company said in an email: “There are a hundred complicated reasons that food prices are up. Unfortunately, it’s easiest to blame grocers, as we’re seeing globally. If we don’t put the truth out there, no one will.”
Loblaw said the customer response to the price freeze was positive, but “It’s a different story on Twitter.”
The company said it had responded to 35 tweets on Jan. 31.
Public relations experts say that the strategy may not have been the supermarket’s best decision.
“There is a very defensive tone from Loblaw as though they are lecturing Canadians on how things work — how food inflation and how the business world functions and how it affects us,” said Rachel Thexton, president at Vancouver-based PR firm, Thexton Public Relations. “That’s not what Canadians want to hear right now. They want to be able to fill their cart with food for their families.”
Thexton added that a lack of transparency surrounding the company’s profits and where they were coming from doesn’t help their case.
Wong, Queen’s UniversiKenneth ty marketing professor, said it’s a lose-lose situation for the food retailers and that there was very little to be gained from tweeting out responses to consumers who are already upset.
“If you are already opposed to Loblaw’s profitability or if you have any negative sentiments towards the Weston family’s wealth, is there anything Loblaws could ever say in a twitter response that is going to change your mind? Probably not,” Wong said.
“If you’re Loblaws, you’re damned if you do and you’re damned if you don’t.”
Thexton and Wong agree that while the company is being slammed for profiting from inflation, it’s not the best idea to have Weston as a Loblaw spokesperson.
“Nobody wants to see one of Canada’s wealthiest in a position of educating and informing consumers on what’s going on in the economy and why the prices are being unfrozen or going up,” Thexton said.
If you are already opposed to Loblaw’s profitability or if you have any negative sentiments towards the Weston family’s wealth, is there anything Loblaws could ever say in a twitter response that is going to change your mind? Probably not.
KENNETH WONG QUEEN’S UNIVERSITY MARKETING PROFESSOR