Grocery stores are necessary for most people as it is challenging to grow food, and there are few other places to buy it. Lately, large chains have exploited people’s need for grocery stores. This year, Walmart and Loblaw have made headlines for taking advantage of customers by allegedly using deceptive pricing schemes and price gouging, respectively. The size of these corporations means many people are affected by their actions. About 80% of Canadians get their food from a grocery store or supermarket. Of the people who use grocery stores, most regularly shop at Walmart or a Loblaw subsidiary (including Loblaws, No Frills, Real Canadian Superstore, and others), making the actions of these corporations particularly impactful.

Shoppers could take stores to court

One option shoppers have is to bring companies to court. In the US, Walmart recently settled a class-action lawsuit which claimed Walmart was deceptively altering prices for weighed items such as citrus and meats. While Walmart continues to deny any wrongdoing, Vassilios Kukorinis, the class representative in the case, told the court about specific times he had fallen victim to the schemes. For example, Mr. Kukorinis purchased a bag of tangerines that only weighed 2lb but were marked and charged by the point-of-sale system as if they were 3lb. The difference in price for Mr. Kukorinis was only a few dollars on each occasion but multiplied by the millions of transactions done by Walmart each week, those few dollars add up to massive profits.

The settlement does some good in that consumers could recover $10 – $500, but unresolved issues remain. First, because of the settlement, only a limited amount of the evidence against Walmart has been made public, and the courts have not evaluated the evidence. This leaves consumers in the dark about how to protect themselves and limits the government’s ability to intervene. Secondly, the settlement only applies to those who made in-person purchases at US locations. This means that if similar practices are found in Canada, another class action would be required for Canadian consumers.

Another option shoppers have is withholding their business. Loblaw and other companies have blamed post-COVID inflation and supply chain issues for their rising costs. However, after the company released its first quarter financials for 2024, it has come to light that prices have been raised beyond what is necessary to keep up with inflation. Loblaw has seen a 9.8% increase in profits from last year and Q1 saw a 15% increase in shareholder dividends. Based on this data, it appears the increase in costs was a choice made by the corporation to increase its profits at customer expense.

Shoppers can spend their money elsewhere

Rather than file a lawsuit against Loblaw, some have tried boycotting the company to protest the high prices. Some of the boycotters' demands are price caps on essential items, no further increase in dividends for stockholders, commitment to use market-led price increases rather than retailer-led increases in the future, and signing the Grocery Code of Conduct. The Code is a voluntary agreement of members of the grocery supply chain, including retailers and suppliers. The goal of the Code is to create an equal playing field among supply chain members, which hopefully, in turn, will mean lower costs and better products for consumers. The CEO of Loblaw, Per Bank, has agreed to sign the code. Unfortunately, the boycott has otherwise been largely unsuccessful. Loblaw has made no notable changes in prices or dividends and media attention for the boycott quickly fizzled out soon after it started.

The main reason the Loblaw boycott has been unsuccessful thus far seems to be insufficient numbers. One survey conducted between May 17th and 19th found that, while more than half of respondents support the boycott, only 18% participated themselves or had a member of their household who participated. Despite their inflated prices, Loblaw stores are still the cheapest option for many people. Loblaw holds 29% of the market share for grocery stores, giving it the consumer base to insulate itself from the effects of boycotts, especially if those boycotts cannot practically be sustained for long periods. Even if consumers could effectively avoid Loblaw stores, the next best option for most would be another large corporation where they would face the same difficulties.

Shoppers can get the government involved

This idea that food retailers like Loblaw are too big for consumers to influence effectively is supported by recent reports from the federal government. These reports suggest that the size of grocery retailers is due to a lack of competition, which has led to higher food costs. The Standing Committee on Agriculture has released a report recommending changes to the Competition Act and other methods to increase competition in the grocery sector, hopefully leading to lower food prices.

This is a good step in the right direction for the government. However, as we have seen, it might be too little too late for those steps to be effective in helping consumers stand alone. What good is preventing retailers from growing if they are already too big to be affected by consumer choices? Perhaps this plan could work in conjunction with incentives for creating small, local grocery retailers and incentives for large retailers to stop raising prices.

So, at the end of the day, what can shoppers do? In the face of the power of large corporations like Walmart and Loblaw, consumers can’t do it on their own. Even in the small wins made by consumers detailed here, it took a collective effort to enact change. Consumers should continue to work together but might need to turn their attention to the government rather than specific stores to have a greater impact. The government is clearly open to helping, but it needs to know that it is politically worthwhile to do so. So, it looks like the best hope for frustrated consumers is to voice their support for such policies to their MPs and to continue keeping food prices in the public discourse.