Yahoo Finance Galen Weston calls Loblaw boycott 'misguided criticism', says grocer not responsible for higher prices
Loblaw (L.TO) chairman Galen Weston on Thursday called the boycott of the company “misguided criticism”, saying the company is not responsible for higher food prices and denouncing calls to steal from the grocery chain.
Speaking at the company’s annual meeting of shareholders on Thursday, Weston said that the grocery industry has faced “unprecedented criticism” amid higher food prices, and that "it is natural Loblaw would be singled out as a focal point for media and government and, of course, consumer frustration.” Weston also says that while shareholders "may be troubled by these often-repeated stories," the grocery retailer "has and will continue to act with integrity."
“Loblaw is not responsible for higher food prices. Inflation is a global issue and is not specific to our company or to our industry. Allegations of profiteering on the back of inflation by grocers are untrue,” Weston said.
“Unfortunately, this rhetoric continues, even though it’s not true.”
A national, month-long boycott of Canada's largest grocery retailer began on Wednesday. The grassroots effort, which started on a Reddit group called “Loblaws is out of control”, includes demands that the company sign the grocery code of conduct, that there will be no further retailer-led price increases in 2024 and no further dividend increases. The Reddit page has 67,000 members as of Thursday afternoon.
Weston pushed back on the boycott on Thursday, calling it an example of “misguided criticism.” He cited an earlier demand of the boycott organizers that the company lower food prices by 15 per cent. The organizers have since posted new ones on Reddit.
“To put that in perspective, it equates to approximately three times the total earnings of the company in a given year, the consequence of which would have been the end of our enterprise, the loss of over 200,000 jobs and billions in annual investments,” Weston said.
“Their frustration is understandable, but this kind of expectation betrays a misunderstanding of what's actually driving food prices higher in this country.”
Loblaw CEO Per Bank also pushed back on the boycott, saying there is misinformation being spread online and highlighting that some have been encouraging people to steal from Loblaw stores. Weston says those that have been “promoting and even celebrating stealing” were “even more discouraging.”
“There's a group of people who have been relentlessly propagating a narrative that they know is false and it is now being used to justify theft on a grand scale. I'm optimistic and hopeful that Canadians reject the notion outright,” he said.
“The cost-of-living pressures in Canada remain significant. But as you've heard today, Loblaw is working hard to bring more value to customers through No Name, hard discount and promotions, and pushing back on unjustified prices for manufacturers.”
Canadian grocery retailers have faced public pressure and scrutiny over soaring food prices as they reported higher earnings. Food prices first soared above headline inflation starting in December 2021, rising as much as 11.4 per cent annually, according to Statistics Canada. February marked the first time since then that the price of food purchased from grocery stores (2.4 per cent increase year-over-year) fell below headline inflation (2.8 per cent.)
On Wednesday, Loblaw reported a first-quarter profit available to common shareholders of $459 million, or $1.47 per diluted share, up from $418 million, or $1.29 per diluted share, during the same period last year. The company also hiked its quarterly dividend by 15 per cent.
With files from The Canadian Press
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.
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