Why the cost of some No Name products in flyers is changing despite the announced price freeze

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Court Park is a frugal shopper who scans grocery flyers every week and waits for certain items to go on sale before adding them to his shopping list.

So he was disappointed on Wednesday to see in his grocery store's flyer that the cost of No Name bagels would apparently increase by four cents from Oct. 26 to Oct 27, even after Loblaw Companies Limited announced a price freeze on all No Name products from Oct. 17 trough Jan. 31, 2023.

"I just found it confusing how you can tell us you are freezing the price but it goes up," Park told CTVNews.ca in a phone interview on Thursday. "A locked in price should be a locked in price."

SALE PRICES NOT FROZEN

A comparison of the No Frills flyers from the weeks beginning Oct. 20 and Oct. 27 showed the cost of other No Name items, such as marshmallows, had also increased from one flyer to the next.

No Name is one of three private label brands owned by the company and sold in its Loblaws, Zehrs, Real Canadian Superstore, No Frills, Fortinos, Atlantic Superstore, Maxi, Your Independent Grocer and Shoppers Drug Mart stores. The other brands are President's Choice and Joe Fresh.

When made aware of the apparent price increases, a Loblaw spokesperson explained the differences only applied to the promotional prices of those items in the flyer, rather than their regular prices.

"We understand our customers are excited about the price freeze and the predictability that means for them," Catherine Thomas, vice president of communication at Loblaw Companies Limited, said in an email to CTVNews.ca on Wednesday. "To be clear, we’ve frozen the regular price of all No Name products. We’ll still provide additional value through sales, but customers can be sure the regular price won’t go up."

PRICES VARY BY STORE

Keen bargain hunters may also have noticed that the prices of No Name products vary between No Frills stores, and stores like Loblaws and Your Independent Grocer. For example, a bag of six No Name bagels from No Frills costs $1.79 this week, while the same bag costs $2.79 at Loblaws, or $2.50 if a shopper buys two or more.

That's because the company sets higher prices for some products in stores that offer services such as bakery, deli and meat counters. In stores that don’t offer the same level of service, prices for the same products may be lower.

"No Frills provides a smaller selection of products (and) less in-store services – like butchers for example – in order to keep prices as low as possible," Thomas wrote. "And yes, the regular price of No Name products have been frozen at all our retail locations, including Loblaws."

Still, Park would like to see more transparency in the pricing of No Name products covered by the price freeze. For example, he said an index of all the frozen prices would have saved him some aggravation while comparing flyer deals this week.

"It's definitely confusing being a consumer, things being the way they are right now in our economic climate. Everybody wants to save a buck and get the best deal they can," he said.

"When people are confused, it's kind of easy to pull the wool over their eyes and yeah, there's not a lot of faith in grocers right now."

ERODING TRUST

Retail analyst Bruce Winder says many Canadians have shared Park's distrust of grocers in recent years, and especially during the pandemic.

"For me, it's just incredible how tense the relationship is between the big grocers, particularly Loblaws, and Canadians," Winder told CTVNews.ca in a phone interview on Thursday.

"There's zero trust. I think it's just a culmination of where we've been over the last several years."

The public image of big grocers took a hit in 2017 after Canada's Competition Bureau launched an investigation into allegations Canada Bread Co. and Weston Foods Canada Inc. had colluded with major grocers Loblaw, Sobeys Inc., Metro Inc., Walmart Canada Corp. and Giant Tiger Stores Ltd. to keep the price of bread in Canada artificially high for 16 years. The Bureau Confirmed in an email to CTVNews.ca on Friday that the investigation is ongoing, and no charges have been laid.

The pandemic and subsequent inflation have haven’t helped improve the relationship between Canadians and big grocers like Loblaw Companies Limited, Sobeys Inc. and Metro Inc.

"With inflation and with Canadians suffering so much, the profits that the big three (grocers) have been enjoying in these difficult times has created an us-versus-them relationship between consumers and grocers," Winder said.

In defence of grocers, Thomas said retail may be the face of inflation, but that it is not the cause.

"Understandably, people are concerned about their grocery bill, and they aren’t looking for excuses. But the price on our shelf represents many costs and many companies up the supply chain," she wrote in an email to CTVNews.ca on Friday. "However, we’re doing what we can, like freezing No Name prices, lowering a lot of others, and handing out more than $1 billion in loyalty points."

She maintained that grocery has always been "one of the most trusted industries in Canada, and we don’t think that has changed."

If Loblaw were actually to raise the prices of No Name items after announcing a price freeze, Winder said, the company wouldn't be breaking any laws. Consumers would have no legal recourse, but the court of public opinion can carry a lot of weight, especially when trust in grocers is already so low, he said.

Someone who suspects a grocery item has been priced in error or that a grocer has raised the price of an item in bad faith might choose to spark a conversation about it on social media, Winder said. But if all they want is clarification or a refund, they can get in touch with the grocer's customer service department.

"It depends how serious the customer wants to take the issue," Winder said.