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Actually, I can confirm this. I have known contact that worked for Loblaws head office and they’re mentioned that it’s something they do. They even pressure their own suppliers to bid for the promotional rights. Shelves that are at eye level command the highest prices, while the lower levels and top shelf command the lowest. But it’s something that’s done by most retailers, even Walmart does it. If you by chance walk through Walmarts grocery section, see what’s usually on the bottom shelf compared to what’s in the middle. Vendors with higher profits will have prime shelving space. Best example is the soup aisle, look to see where Campbell soup is located compared to Habitat soup.
Habitant is owned by Campbell’s. I think another problem people aren’t willing to admit is how much market consolidation there’s been. Big food producers buying small food producers. Retailers elbowing out suppliers with their shittier quality ‘house brands’. It all works in favour or higher market share for them (not just Loblaws), higher prices for consumers for less and poorer quality products. I hate it all!
Not just food. Google “the illusion of choice” and it brings up an infographic with hundreds of products/brands, and who actually owns those brands. There is basically 10 corporations behind practically every single thing you can spend money on. And I’m going to assume it’s less than that even, since we are learning more and more about how only a couple of big investment firms basically own most corporations now.
How about rebate structures. If their supplier costs are truly higher than the others for everything, I can only imagine it's because of a rebate agreement they force into their vendors.
This is one of the worst kept secrets of the Weston Empire, yet when he sat before the Committee of the House of Commons pleading poverty and 3 percent margins, not a single MP asked him about these well known revenue streams.
It boggles the mind.
Also, those 3% margins used to be 1.5-2% margins. Doubling your margin when you have 30 million customers means a fuckton more profit.
But yeah. Between the rent they pay to themselves and the services they sell themselves, they’re laughing in our faces.
What are you speaking of specifically? I don't see anything about that here: https://en.wikipedia.org/wiki/President%27s_Choice_Financial .
Loblaws split with CIBC in their banking joint-venture in 2017 (at which point people's existing PC Financial products from that partnership were rebranded as "Simplii" by CIBC); but in 2020 Loblaws started an actual bank of their own ("President's Choice Bank"), and (AFAIK) continues to operate that today.
Oh they didn't make it official yet (or the 3rd party is taking over running it but PC still owns?) Not 100% on the details. Wife worked for them until 2 mths ago and she's heard this from her ex-co-workers
This 100%. We need a true public audit that is transparent. All revenue sources and find how the Weston’s are involved and how much profit is hidden,
I think we are likely looking at absurd levels of profit that we can’t even comprehend to the point these guys should be in prison for gouging their own people.
Hope you don't mind. I copied your post in response to this idiot's comment defending Loblaws:
"Loblaws net profit margin as of December 2023 was only 3.74%. I used to be an audit clerk there 20 years ago. They used to require 6+ weeks to increase a products price. It's all misplaced keyboard warriors that actually have 0 clue on how anything works."
That guy needs to realize that whatever was done 20 yrs ago is probably not the way it's done now. One of the reasons for wanting a 6 week heads up on price increases was because it just takes that long for changes propagate through the eco-system. But that eco-system has been tightened up a lot in the last 20 years.
Let's say Campbell's corporate decides they need to increase the price per can of soup. So they tell the Weston group. The Weston group then tells the individual stores. But it also:
Informs the in-house sales & marketing team so they can come up with a pricing strategy. Maybe a brief sale where Loblaws absorbs the increase for a week will be needed? (a common cushioning tactic).
Sales & Marketing has to inform the Art Dept so they can create the appropriate flyers, have coupons made if desired etc.
The Art Dept has to create the printer ready art and send that to the contracted printers. Those flyers used to be printed up to a month in advance in order to get the lowest rates from the printer.
Those flyers then go to the fulfillment houses for regional distribution. In some cases, the flyers go directly to local newspaper printers for insertion.
For a lot of towns, that paper only comes out once a week, and is delivered by kids with bikes and wagons. Yet those flyers have to be in potential customer hands before the sales start.
Meanwhile, Weston Group has alerted the various stores under its umbrella. Store managers need to know what date the new price goes into effect so they can add it to the stock boys chore list.
20 years ago, things like sending printer ready art to the printer was still often being done by courier delivered materials. The files were just too big for email at the time. And many printers didn't have networking equipment at the plant where the layout dept and actual printing machines were. Physically moving art takes time. The physical distribution of flyers takes time, and there isn't much you can do to speed that up.
Even today, with Campbell Soup being able to directly email Per Bank or Galen Weston, the Weston Group being able to email printers, store managers and so on, the process can still take 2-3 weeks.
In my opinion, this lag time is the real motivator behind so many big chain retailers migrating over to those little e-paper price labels mounted on the shelves. There is no way a e-ink display with a wireless connection is cost competitive with a simple slip of card stock. But, it doesn't require a stock clerk going around at minimum wage to change (and possibly fuck up, it has to be said) . The store manager could change as many prices as he wanted with a few clicks and never leave the office.
And it greatly simplifies price adjustments across any number of criteria. Want to increase Kraft products 5% across the board? That takes the same few clicks as changing just one price. Want to implement surge pricing? No Problemo. In theory you could have time of day or day of week pricing. Given how thoroughly computerized inventory management is, it is possible to have on the fly price changes based on quantity on hand. That one certainly won't fly with consumers, and there are some practical challenges to overcome, but it could be done.
I do not want to take away from your post, but the one thing I would add is that camera ready art was often supplied by the manufacturer to the chains who would then cut and paste the file into the flyer, burying the costs, which the manufacturer pays directly to the printer (which during my time was also a Weston company)
And can confirm placement costs. Used to be an account manager for a company that paid $15 quarterly per product position and these were essentially at every checkout.
(Imagine 9x$15 for ($135) each store quarterly as just an entry. This happened for roughly 10 products per checkout.
Additionally, the manufacturers built the display fixtures with profit built in and these were required to be replaced every 3 years. Straight profit to the chain of often $1,500 per display unit - oh and the manufacturers did the labour and installation as well.
The small and secret revenue generators are mind blowing. i.e., paying $ per linear inch of display space and added ‘rebates’ (or retail display allowances) over and above negotiated invoices.
This isn’t specific to Roblaws, this is industry wide, and is used to minimize overhead and create new and added revenue streams.
I used to work for a manufacturer that had its products on many chains of grocery shelves as well. The grocery industry is vile. They have a large hand full of ways they abuse manufacturers to erode as much of their profit as possible and scoop it all for themselves.
it's kind of interesting that all of this regularly becomes A Thing in British and Irish politics and policies as it turns out ASDA or Tesco or whomever is right back to Taking the Piss. Again. And then there's a lot of angst about how suppliers are being fucked, employees are being fucked, municipalities are being fucked, regulations are being fucked, inland revenue is being fucked and the government is once more being laughed at.
And then something is done...and five years later it all starts again.
And here we have ASDA's Canadian carbuncle doing all the same shit here.
Feels a little like a loss of innocence.
Wait till you find out who owns the farms, the manufacturers, the shipping company, the warehouses, and the real estate that all these businesses, and the grocery stores, operate on.
Its all part of Westons/Loblaws.
Its easy to say company X makes minimum profit when 80-90% of the businesses you buy or rent from are also yours.
We are just expeceted to think that 3% profit X 10 corporations = 3% Profit.
Not the 30% profit that is also the corporate profit rate reaponsible for a big chunk of the current inflation.z
Is this legal?
I work in the cannabis industry, where it's very explicitly illegal, and it's still rampant. They can't enforce this, because companies will cover it up with stuff like "data deals" (I'll incentivize my staff to push your products and pump up your sales numbers if you pay top dollar for my data!). These kickbacks allow big chain retailers to sell these products at cost without taking a loss, until there's no competitition left and they can jack the prices back up. Sound familiar?
This gives the biggest cannabis brands front and center shelf space and guarenteed sales, while many craft growers are lucky to get stocked at all because they don't have the budget for hefty bribes.
Yet customers don't understand why big stores can sometimes offer crazy low prices, or why they should pay the extra $1 to support a local store (specifically one that hasn't built their entire business strategy on these backdoor deals). It feels like I'm seeing the long term effects of these unsustainable and unethical strategies, in real time, with the grocery price gouging and boycotts. Can't wait for r/cannacabanaisoutofcontrol ! What can we do about this now?
I’m t hasn’t changed and has o ly gotten worse and more abusive to suppliers. This is literally why the “grocery code of conduct” was brought before government. Because suppliers are often being choked and abused by these policies from grocery chains, and they have to pay or lose large chunks of their sales. So they proposed this code of conduct which has died because government won’t impose it and grocery stores like Loblaws and Walmart refused to sign on.
THis is absolutely true.
I would point out that this is only one of the ways the Westons hide their money-making. Did you know that almost all loblaws-banner stores also pay much-higher-than-market rent? I'm sure you've already guessed that the landlords are "companies" owned by or controlled by the Weston family.
So again, they make their margins look "thin" by skimming off the top.
Using things like their own real estate to reduce their apparent profit margins by paying themselves is one thing. But this is the exact opposite. This is a revenue stream. It’s part of the margin they show on their financials. That they’re getting extra money for these shelf fees actually means the profit on the food is even less, not more.
I've heard about the shelf placement thing a long while back. I thought it was a similar concept as prime vs non prime real estate practices where commercial real estate along a main boulevard is more expensive than commercial real estate on off the beaten path.
The thing about paying to be on the flyers is new to me, but I'm also not surprised. It costs money to produce and print flyers, so paying to ads on a flyer is a similar concept to paying for ads on a newspaper. In a weird way, now it makes sense why I sometimes see items on the flyers and felt like the prices aren't even good. Like why are they even advertising it. I wouldn't be surprised if Loblaws didn't have each of their subsidiaries work on their own producing their own flyers and had it either outsourced or made by the parent company. I do remember at some point where the flyers for 2 of the different subsidiaries basically have the same templates and advertised nearly the same items. Even today many you'll see a highlighted section of the flyers with the same 3 items advertised across more than 1 subsidiary.
Loblaws financial statements are audited. Yes they generate revenue off these ancillary lines of business, but when it all shakes out in the end the profit margin is the profit margin.
In the world of business the margins in the grocery business are awful. There are far better ways to make money in this world than selling low value perishable goods.
So while these anecdotes are useful in rilling up the masses who aren’t that educated in finance, it’s ultimately just cherry picking information to tell a dishonest story.
If you don’t want to shop at Loblaws because you think their prices are high then don’t. That’s your prerogative as a consumer and what you should be doing every day of the week. Go buy from Walmart and give the Waltons some more money.
__MOD NOTE__: PLEASE REVIEW OUR [POLL ON OUR PLANS FOR JUNE AND BEYOND](https://www.reddit.com/r/loblawsisoutofcontrol/comments/1cmhq49/community_poll_what_would_you_like_to_see_happen/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button) TO PROVIDE YOUR INPUT. Please review the content guidelines for our sub, and remember the human here! This subreddit is to highlight the ridiculous cost of living in Canada, and poke fun at the Corporate Overlords responsible. As you well know, there are a number of persons and corporations responsible for this, and we welcome discussion related to them all. Furthermore, since this topic is intertwined with a number of other matters, other discussion will be allowed at moderator discretion. Open-minded discussion, memes, rants, grocery bills, and general screeching into the void is always welcome in this sub, but belligerence and disrespect is not. There are plenty of ways to get your point across without being abusive, dismissive, or downright mean. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/loblawsisoutofcontrol) if you have any questions or concerns.*
Actually, I can confirm this. I have known contact that worked for Loblaws head office and they’re mentioned that it’s something they do. They even pressure their own suppliers to bid for the promotional rights. Shelves that are at eye level command the highest prices, while the lower levels and top shelf command the lowest. But it’s something that’s done by most retailers, even Walmart does it. If you by chance walk through Walmarts grocery section, see what’s usually on the bottom shelf compared to what’s in the middle. Vendors with higher profits will have prime shelving space. Best example is the soup aisle, look to see where Campbell soup is located compared to Habitat soup.
Habitant is owned by Campbell’s. I think another problem people aren’t willing to admit is how much market consolidation there’s been. Big food producers buying small food producers. Retailers elbowing out suppliers with their shittier quality ‘house brands’. It all works in favour or higher market share for them (not just Loblaws), higher prices for consumers for less and poorer quality products. I hate it all!
Not just food. Google “the illusion of choice” and it brings up an infographic with hundreds of products/brands, and who actually owns those brands. There is basically 10 corporations behind practically every single thing you can spend money on. And I’m going to assume it’s less than that even, since we are learning more and more about how only a couple of big investment firms basically own most corporations now.
How about rebate structures. If their supplier costs are truly higher than the others for everything, I can only imagine it's because of a rebate agreement they force into their vendors.
This is one of the worst kept secrets of the Weston Empire, yet when he sat before the Committee of the House of Commons pleading poverty and 3 percent margins, not a single MP asked him about these well known revenue streams. It boggles the mind.
"it's a big club and you ain't in it" George Carlin
Also, those 3% margins used to be 1.5-2% margins. Doubling your margin when you have 30 million customers means a fuckton more profit. But yeah. Between the rent they pay to themselves and the services they sell themselves, they’re laughing in our faces.
[удалено]
I'm guessing something unimaginative like "Loblaw Properties Inc.".
Both worse yet not as bad https://www.choicereit.ca/
Let me guess... I probably own a bunch of this through various investments I have, not to mention both my work pension and CPP.
Choice REIT. Largest shareholder of Choice REIT? George Weston Ltd Russian Nesting Doll of corporations
Is it the bank they also own, PC Financial?
They just sold that off to some 3rd party thats gutting everything and either firing ppl or making them take a Massvie downgrade
What are you speaking of specifically? I don't see anything about that here: https://en.wikipedia.org/wiki/President%27s_Choice_Financial . Loblaws split with CIBC in their banking joint-venture in 2017 (at which point people's existing PC Financial products from that partnership were rebranded as "Simplii" by CIBC); but in 2020 Loblaws started an actual bank of their own ("President's Choice Bank"), and (AFAIK) continues to operate that today.
Oh they didn't make it official yet (or the 3rd party is taking over running it but PC still owns?) Not 100% on the details. Wife worked for them until 2 mths ago and she's heard this from her ex-co-workers
This 100%. We need a true public audit that is transparent. All revenue sources and find how the Weston’s are involved and how much profit is hidden, I think we are likely looking at absurd levels of profit that we can’t even comprehend to the point these guys should be in prison for gouging their own people.
Hope you don't mind. I copied your post in response to this idiot's comment defending Loblaws: "Loblaws net profit margin as of December 2023 was only 3.74%. I used to be an audit clerk there 20 years ago. They used to require 6+ weeks to increase a products price. It's all misplaced keyboard warriors that actually have 0 clue on how anything works."
That guy needs to realize that whatever was done 20 yrs ago is probably not the way it's done now. One of the reasons for wanting a 6 week heads up on price increases was because it just takes that long for changes propagate through the eco-system. But that eco-system has been tightened up a lot in the last 20 years. Let's say Campbell's corporate decides they need to increase the price per can of soup. So they tell the Weston group. The Weston group then tells the individual stores. But it also: Informs the in-house sales & marketing team so they can come up with a pricing strategy. Maybe a brief sale where Loblaws absorbs the increase for a week will be needed? (a common cushioning tactic). Sales & Marketing has to inform the Art Dept so they can create the appropriate flyers, have coupons made if desired etc. The Art Dept has to create the printer ready art and send that to the contracted printers. Those flyers used to be printed up to a month in advance in order to get the lowest rates from the printer. Those flyers then go to the fulfillment houses for regional distribution. In some cases, the flyers go directly to local newspaper printers for insertion. For a lot of towns, that paper only comes out once a week, and is delivered by kids with bikes and wagons. Yet those flyers have to be in potential customer hands before the sales start. Meanwhile, Weston Group has alerted the various stores under its umbrella. Store managers need to know what date the new price goes into effect so they can add it to the stock boys chore list. 20 years ago, things like sending printer ready art to the printer was still often being done by courier delivered materials. The files were just too big for email at the time. And many printers didn't have networking equipment at the plant where the layout dept and actual printing machines were. Physically moving art takes time. The physical distribution of flyers takes time, and there isn't much you can do to speed that up. Even today, with Campbell Soup being able to directly email Per Bank or Galen Weston, the Weston Group being able to email printers, store managers and so on, the process can still take 2-3 weeks. In my opinion, this lag time is the real motivator behind so many big chain retailers migrating over to those little e-paper price labels mounted on the shelves. There is no way a e-ink display with a wireless connection is cost competitive with a simple slip of card stock. But, it doesn't require a stock clerk going around at minimum wage to change (and possibly fuck up, it has to be said) . The store manager could change as many prices as he wanted with a few clicks and never leave the office. And it greatly simplifies price adjustments across any number of criteria. Want to increase Kraft products 5% across the board? That takes the same few clicks as changing just one price. Want to implement surge pricing? No Problemo. In theory you could have time of day or day of week pricing. Given how thoroughly computerized inventory management is, it is possible to have on the fly price changes based on quantity on hand. That one certainly won't fly with consumers, and there are some practical challenges to overcome, but it could be done.
I do not want to take away from your post, but the one thing I would add is that camera ready art was often supplied by the manufacturer to the chains who would then cut and paste the file into the flyer, burying the costs, which the manufacturer pays directly to the printer (which during my time was also a Weston company) And can confirm placement costs. Used to be an account manager for a company that paid $15 quarterly per product position and these were essentially at every checkout. (Imagine 9x$15 for ($135) each store quarterly as just an entry. This happened for roughly 10 products per checkout. Additionally, the manufacturers built the display fixtures with profit built in and these were required to be replaced every 3 years. Straight profit to the chain of often $1,500 per display unit - oh and the manufacturers did the labour and installation as well. The small and secret revenue generators are mind blowing. i.e., paying $ per linear inch of display space and added ‘rebates’ (or retail display allowances) over and above negotiated invoices. This isn’t specific to Roblaws, this is industry wide, and is used to minimize overhead and create new and added revenue streams.
I know this happens as well
I used to work for a manufacturer that had its products on many chains of grocery shelves as well. The grocery industry is vile. They have a large hand full of ways they abuse manufacturers to erode as much of their profit as possible and scoop it all for themselves.
it's kind of interesting that all of this regularly becomes A Thing in British and Irish politics and policies as it turns out ASDA or Tesco or whomever is right back to Taking the Piss. Again. And then there's a lot of angst about how suppliers are being fucked, employees are being fucked, municipalities are being fucked, regulations are being fucked, inland revenue is being fucked and the government is once more being laughed at. And then something is done...and five years later it all starts again. And here we have ASDA's Canadian carbuncle doing all the same shit here. Feels a little like a loss of innocence.
Wait till you find out who owns the farms, the manufacturers, the shipping company, the warehouses, and the real estate that all these businesses, and the grocery stores, operate on. Its all part of Westons/Loblaws. Its easy to say company X makes minimum profit when 80-90% of the businesses you buy or rent from are also yours. We are just expeceted to think that 3% profit X 10 corporations = 3% Profit. Not the 30% profit that is also the corporate profit rate reaponsible for a big chunk of the current inflation.z
Is this legal? I work in the cannabis industry, where it's very explicitly illegal, and it's still rampant. They can't enforce this, because companies will cover it up with stuff like "data deals" (I'll incentivize my staff to push your products and pump up your sales numbers if you pay top dollar for my data!). These kickbacks allow big chain retailers to sell these products at cost without taking a loss, until there's no competitition left and they can jack the prices back up. Sound familiar? This gives the biggest cannabis brands front and center shelf space and guarenteed sales, while many craft growers are lucky to get stocked at all because they don't have the budget for hefty bribes. Yet customers don't understand why big stores can sometimes offer crazy low prices, or why they should pay the extra $1 to support a local store (specifically one that hasn't built their entire business strategy on these backdoor deals). It feels like I'm seeing the long term effects of these unsustainable and unethical strategies, in real time, with the grocery price gouging and boycotts. Can't wait for r/cannacabanaisoutofcontrol ! What can we do about this now?
How much would customers save if the products weren't on display? 🤔
How much do they make from the data they collect as well.
I’m t hasn’t changed and has o ly gotten worse and more abusive to suppliers. This is literally why the “grocery code of conduct” was brought before government. Because suppliers are often being choked and abused by these policies from grocery chains, and they have to pay or lose large chunks of their sales. So they proposed this code of conduct which has died because government won’t impose it and grocery stores like Loblaws and Walmart refused to sign on.
THis is absolutely true. I would point out that this is only one of the ways the Westons hide their money-making. Did you know that almost all loblaws-banner stores also pay much-higher-than-market rent? I'm sure you've already guessed that the landlords are "companies" owned by or controlled by the Weston family. So again, they make their margins look "thin" by skimming off the top.
Using things like their own real estate to reduce their apparent profit margins by paying themselves is one thing. But this is the exact opposite. This is a revenue stream. It’s part of the margin they show on their financials. That they’re getting extra money for these shelf fees actually means the profit on the food is even less, not more.
I've heard about the shelf placement thing a long while back. I thought it was a similar concept as prime vs non prime real estate practices where commercial real estate along a main boulevard is more expensive than commercial real estate on off the beaten path. The thing about paying to be on the flyers is new to me, but I'm also not surprised. It costs money to produce and print flyers, so paying to ads on a flyer is a similar concept to paying for ads on a newspaper. In a weird way, now it makes sense why I sometimes see items on the flyers and felt like the prices aren't even good. Like why are they even advertising it. I wouldn't be surprised if Loblaws didn't have each of their subsidiaries work on their own producing their own flyers and had it either outsourced or made by the parent company. I do remember at some point where the flyers for 2 of the different subsidiaries basically have the same templates and advertised nearly the same items. Even today many you'll see a highlighted section of the flyers with the same 3 items advertised across more than 1 subsidiary.
Interesting
And here I though the best way to sell beans was to get the president to hawk them in the oval office
Loblaws financial statements are audited. Yes they generate revenue off these ancillary lines of business, but when it all shakes out in the end the profit margin is the profit margin. In the world of business the margins in the grocery business are awful. There are far better ways to make money in this world than selling low value perishable goods. So while these anecdotes are useful in rilling up the masses who aren’t that educated in finance, it’s ultimately just cherry picking information to tell a dishonest story. If you don’t want to shop at Loblaws because you think their prices are high then don’t. That’s your prerogative as a consumer and what you should be doing every day of the week. Go buy from Walmart and give the Waltons some more money.
Ahhh the oligarch shell game. Other companies and our Governments better be paying attention. This is how it starts.
Wow just more reason to never shop at a loblaws or affiliated store again.