A Loblaws grocery store at Leslie Street and Lakeshore Boulevard in Toronto.Abhijit Alka Anil/The Globe and Mail
Customer concerns over inflation and profit gains at big grocery chains have piqued Canadians’ interest in how groceries are priced at different stores – even those owned by the same company.
To see how house-brand items compare at various Loblaw-owned stores, The Globe and Mail selected 15 products at Loblaws L-T, Shoppers Drug Mart and No Frills locations in Ottawa.
Our shopping list consisted of commonly bought items including paper towels, canned food, cheese, coffee and cookies. At Shoppers Drug Mart, the total for the 15 items before tax would be $77.85; at Loblaws, the same would cost $74.86; at No Frills, it would come to $73.07. If we had bought each product on our list at the store with the cheapest price, the total bill would be $63.86.
We visited all three stores on May 15. The Shoppers Drug Mart and No Frills locations were 450 metres apart in Ottawa’s suburb of Orleans, while the Loblaws store was roughly 16 kilometres away, nestled between The Glebe and Centretown. The Glebe is one of the most expensive neighbourhoods in the city.
We found that shopping at a discount store such as No Frills doesn’t always save you the most, even though it had some of the lowest prices among the stores we compared. For example, No Name salted-top crackers were priced at $3.29 at No Frills and $3.99 at Loblaws, but at Shoppers Drug Mart, they were on sale for $2.49.
Shoppers had the most sales on the items we compared, such as Farmer’s Market blueberry muffins, which were 50 per cent off. Other sale items included No Name beef broth and President’s Choice Loads of Raisins cereal.
Of the 15 items we compared, seven were on sale at Shoppers, two at Loblaws and one at No Frills. At Shoppers Drug Mart, President’s Choice Dipped and Chewy granola bars were on sale for $2.79 from $3.99; the same item at No Frills was on sale for $1.99 from $2.79.
Until May 16, it was cheaper to buy No Name jumbo paper towels at Shoppers, where they were on sale for $4.49, than at Loblaws and No Frills, where they were priced at $5.99.
No Name is Loblaw’s generic brand and is considered to be cheaper than the company’s other house brands.
Loblaw, in particular, has drawn ire from the public over prices, prompting a customer boycott this month. It’s also been criticized because it was slow to sign a grocer’s code of conduct, which aims to improve fair dealings between grocers and suppliers, though the company has since said it supports a newer version of the code.
David Hardisty, an associate professor of marketing and behavioural science at the University of British Columbia, said that while most Canadian grocery chains follow similar pricing practices, it is easier for parent companies such as Loblaw and Metro to charge different prices at their various store banners.
“If you have Shoppers and a No Frills right next to each other with different prices, most consumers won’t realize it’s actually the same company selling the same thing at two different prices,” he said.
Part of the discrepancy in cost can be explained by price discrimination, which happens when sellers charge customers differently for the same product or service, said Prof. Hardisty. “People going to No Frills are more cost-conscious, so there might be a lower price there.”
In an e-mail to The Globe and Mail, Loblaw spokesperson Catherine Thomas said that Loblaws locations offer more selection and amenities including in-store butchers and bakers compared to No Frills, where items are often priced lower.
Michael von Massow, a food economics professor at the University of Guelph, said operating costs including staff wages and geographic location could affect prices at various stores. Then there is the inventory and how fast it sells.
“If it’s a slower-moving item in one kind of store, then it might need to have a little higher price to justify the shelf space,” he said.
He suggests consumers be flexible and willing to substitute items on their grocery lists, buy foods in season and become familiar with regular deals in the stores they frequent. “There is some repetition in what’s on special, and you can take advantage of that cycle.”
He added that discount stores such as No Frills are less likely to have sales than stores with higher-priced items. But No Frills offers price matching, so check other stores’ flyers and online.
“I never buy yogurt at full price – I know that it’s going to regularly be on sale,” he said. “And so when it’s on sale, I buy a couple of weeks’ worth.”
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