Galen Weston Jr., executive chairman of Loblaw, at a news conference in Toronto on July 15, 2013.Michelle Siu/The Canadian Press
Sylvain Charlebois is professor of food distribution and policy and the director of the Agri-Food Analytics Lab at Dalhousie University.
It all started with one reporter taking a simple, trivial photo of an overpriced pack of five boneless, skinless chicken breasts. The price was $37 – $26.87 a kilogram – a world-class sticker shocker. That’s at least double what one would expect to pay for chicken breasts.
Within hours, the picture became the lightning rod for frustrated consumers on social media. Loblaw Cos. Ltd. L-T and Galen G. Weston – Loblaw executive chairman, president and well-known public persona of the company’s brand – became public enemy No. 1. Attacks were instant, and mostly vicious.
On the surface, the collective uproar against Loblaw lacked any rational thinking. The chicken breasts in the picture were skinless, boneless, and free from hormones and antibiotics, which would make them premium products. Other retailers in the Greater Toronto Area were selling similar products at similar price points.
Furthermore, for months now the poultry industry, including egg producers, has been challenged by an avian flu outbreak, affecting almost 300 farms across the country. Supply-side pressures have been significant for a while.
What also needs to be underscored is that chicken production is supply-managed in Canada. That means that prices are set by agricultural marketing boards, which in turn are heavily influenced by production costs. Because of that, poultry and egg prices have historically been higher in Canada than elsewhere in the Western world.
While supply management has offered Canadian producers and consumers stable prices, since early 2020, the meat counter has increasingly become expensive, no matter what protein you are after. Many of these factors are far beyond Loblaw’s control.
Call it “chickengate” if you will, but instant public outcries like the one we witnessed with the photo of overpriced chicken breasts do happen for a reason. The last time Canada’s food inflation rate was below our country’s general inflation rate was in October, 2021. While everything in our lives got more expensive, it got significantly worse at the grocery store.
Consumers are actively looking for a scapegoat, one they can relate to. Most consumers barely appreciate how farming, logistics or even food processing work, but most of us often go to a grocery store. It’s a familiar environment. However, grocery stores are also portals to a very complex food system we can barely see and understand, so promptly blaming grocers for overpriced products is instinctive.
Like in many Western countries, higher food prices have been politicized in Canada leading to a parliamentary investigation in Ottawa, and broad-based inflationary support payments to individuals in provinces such as Quebec and Prince Edward Island. These payments will likely make food inflation worse, but it doesn’t matter.
Canada has one of the lowest food inflation rates in the Western world. Amongst G7 countries, only Japan has a lower food inflation rate right now. Higher food prices are a global phenomenon, full stop. Even if it makes little sense to blame one grocer, or even one man, for our ills at the grocery store, Canadians have every right to be upset. Context is everything, and consumers are on edge and will second-guess anything and everything and have every reason to do so.
The bread price-fixing scandal (which lasted 14 years), the hero-pay debacle during the COVID-19 pandemic that almost forced consumers to use self-checkout counters, all add up to many Canadians feeling incredibly vulnerable and unprotected. In December, our parliamentary standing committee on agriculture and agri-food called top grocers to testify in Ottawa as part of an investigation of food inflation.
None of the CEOs showed up, including Mr. Weston himself. All of them opted to send their financial goons instead. The CEOs should have had the decency to show up and oblige our House of Commons, which represents the Canadian people.
The chicken-breast incident points to how incredibly delicate things are right now. The food industry, and particularly grocers, are facing a crisis of confidence, no less. Consumers have become hyper-sensitive to any potential evidence suggesting abuse of market power, and grocers will need to navigate the coming months with extreme caution. Showing more public empathy would be a good start.
In the meantime, consumers should know prices even before they show up at the grocery store, stay calm and read labels. If a price is beyond what you expected, just walk away. A more affordable substitute in the same store is likely within reach. Consumers have more power than they believe.