Loblaws Is Reducing Discounts On Expiring Foods & People Aren't Happy About It

In a move that has generated widespread discontent among Canadian consumers, Loblaws, one of the country's largest grocery chains, has announced a significant reduction in discounts on expiring foods.

A previous policy offering 50% off has been scaled back to 30%, disadvantaging budget-way shoppers, especially in the current climate of soaring food prices.

Industry implications

Dr. Sylvain Charlebois, from the Agri-Food Analytics Lab at Dalhousie University, notes that around 1 in 5 consumers now regularly purchase "last day of sale" deals. The discounts, often referred to as "enjoy tonight" offers are key for shoppers looking to stretch their grocery funds.

Loblaw's initial silence on the policy change was broken following an inquiry from the Lab. The company's rationale for the reduction in discounts was to move towards a "more consistent and predictable pricing strategy," aligning with competitors. The explanation, however, has sparked questions about the broader implications of such a strategy in the grocery industry.

"Loblaw's decision… may seem like a strategic move, but it raises concerns about the industry's approach to pricing coordination, again," said Charlebois.

The simultaneous adoption of similar discounting approaches by multiple grocery stores could raise suspicions of coordinated efforts to maintain higher prices, even on products nearing expiration. The practice, reminiscent of the bread-price-fixing scandal, hints at a deeper issue of price or discount coordination within the industry.

The change also highlights the growing role of food-rescuing apps like Flashfood, Food Hero, and Too Good To Go. As discounts on last-day sales items diminish at Loblaw, these apps may become a more attractive option for consumers seeking deals on near-expiry products. However, it's unlikely that this policy change will lead to increased food waste, as these products are expected to be sold through alternative channels.

Consumer reactions

Loblaw's decision has been perceived as a strategic move away from focusing consumers on discounted items, leaving many customers feeling blindsided.

"Squeezing every cent from customers. Never minding we have shrink-inflation and price-inflation, we now have expiry-inflation," tweeted one commenter.

"More edible food in the dumpster... brutal," remarked another.

"Ultimately consumers decide if a max 30% discount is sufficient. If not, then Loblaw ends up disposing of the product; & the entire cost of the product is 'written off'. So, pay full price; ignore the 30% discounts; damn the waste; and really impact Loblaw's profit/bottom line," suggested a third.

The broader implications of Loblaw's decision extend beyond just consumer dissatisfaction. It raises a critical question for the Competition Bureau: should such discount-matching strategies be investigated as potential anti-competitive behavior? The lack of transparency and public announcement from Loblaw only adds to the suspicion and concern among Canadians who are already grappling with high food inflation rates.

Beyond the price tag

As of December, Canada’s food inflation rate remained steady at 5% for in-store purchases. While certain food categories like meat, fish, and dairy have seen a decrease in prices, fruits and vegetables have experienced a rise. The reduction in discounts on expiring foods not only affects the wallets of everyday Canadians but also calls into question the competitive practices of major grocery chains.

"This is an issue that the Competition Bureau should investigate. Otherwise, Canadians may continue to find similar pricing strategies in all major grocery stores," said Charlebois.