Loblaw 50 per cent off stickers to return after public anger over discount reduction

Loblaw Cos. Ltd. says it's reversing course on a decision to reduce its discounts on grocery items nearing their best-before date. (THE CANADIAN PRESS/Aaron Vincent Elkaim)

Loblaw Cos. Ltd. is reversing course on a decision to reduce its discounts on grocery items nearing their best-before date.

Spokeswoman Catherine Thomas confirmed Friday afternoon that after listening to feedback from customers and colleagues, Loblaw is reverting back to its previous discounting practice of marking down last-day sale items by between 30 and 50 per cent.

"Customers can expect to see (50 per cent) stickers returning in the next few weeks," she said in an email.

Canada's largest grocer drew public ire this week after it decided that all last-day sale items would be marked down by 30 per cent across the board to provide more predictability and consistency.

The move even prompted NDP MP Alistair MacGregor to call for an investigation into potential anti-competitive practices, citing comments by Loblaw indicating they were changing the discount to align with their competitors.

However, both the Retail Council of Canada and competition expert Michael Osborne said price-matching and discount-matching are normal practices in the industry.

The shift put Loblaw in line with its competitors, J.C. Williams Group retail analyst Lisa Hutcheson said on Tuesday.

With demand for discounted food going up, the grocers have more room to sell those items at a smaller discount, she explained.

"What drives markdowns for retailers is whether it's selling or not selling," she said.

Metro told The Canadian Press earlier this week that it has marked down items nearing their best-before date by up to 30 per cent for more than two decades.

The country's biggest grocers have been under scrutiny from the public and government alike as Canadians continue to grapple with rising food prices.

While inflation and food inflation have come down from their highs as interest rate hikes continue to work their way through the economy, price growth is still elevated from the Bank of Canada's target rate of two per cent.

Overall inflation in December was 3.4 per cent year over year, Statistics Canada reported this week. Grocery price inflation was 4.7 per cent.

Shoppers have increasingly turned to discount grocery stores in a bid to save money as the cost of living rises.

These discount banners are usually under the umbrella of the major grocers, such as Loblaw's No Frills, and the grocers have been expanding their discount footprints to meet demand.

With files from Ritika Dubey. This report by The Canadian Press was first published Jan. 19, 2024.