Loblaw reports $13.58B in Q1 revenue, as Reddit group's boycott kicks off

LoblawCompanies reported $13.58 billion in first-quarter revenue a 4.5 per cent increasefrom a year earlier on Wednesday morning, the same day that a group of frustrated shoppers said they would begin a month-long boycott of the grocery retailer.

The company's quarterly profit was $459 million,marking a9.8 per cent increase. Earnings per share were $1.72 on an adjusted basis, an increase of 11per cent, the company said. It hiked its quarterly dividends to shareholders by 15 per cent.

Retail segmentsalesrose 4.4 per cent to $13.29 billion. Food retail saleswere up by 3.4 per cent, while the company'sdrug retail sales under the Shoppers Drug Mart bannerincreased by fourper cent.

Agroup of shoppers who say they are fed up with the company's grocery prices said that as of Wednesday they would start boycotting the retailer's flagship Loblaws stores and its offshoot brands, including No Frills, Provigo and City Market.

The Reddit group,called "Loblaws is out of control,"currently has 62,000 members. It is not known how many people will participate in the boycott.

Organizers want grocery code of conduct signed

Emily Johnson, a boycott organizer from Milton, Ont., told CBC News in an interview that its "end goal is to be reducing grocery prices and to be increasing food security for all Canadians.

"We'd like to see commitments to affordable pricing [and]price caps on essential items," she said.

Johnson said one of the group's primary demands is that Loblaw sign the industry-developed Grocery Code of Conduct, a set of proposed rules that will govern how major grocery companies interact with their suppliers.

LISTEN | What the leader of the Loblaws boycott hopes the group will achieve:

The Current19:24Fed-up consumers are boycotting Loblaws

Loblawand Walmart previously indicated that they wouldn't sign an earlierdraft of the voluntary code, saying it could lead to higher prices for Canadians.

However, Loblaw CEO Per Bank noted Wednesday that the tone of those discussions has changed. "I'm more optimistic now than before that we can land an agreement on the code," he said during the company's earnings call.

• Are you considering boycotting Loblaw stores for the month of May? Tell us why or why not in an email to ask@cbc.ca.

Major grocers under intense scrutiny

Loblaw and other major grocers have come under intense scrutiny, both by politicians and consumers, for reporting higher profits as some Canadians struggle to afford groceries.

February marked the first time since October2021 that the inflation rate of food purchased from storeswas lower than the overall inflation rate of all items,according to data from Statistics Canada.

While the pace of growthhas taken a slower turn in recent months,grocery prices are still rising.

During the earnings call, Loblaw chief financial officer Richard Dufresne said that its own inflation rate for food, or what it calls "internal inflation," was lower than the consumer price index (CPI) for food reported last month by Statistics Canada.

CBC News has not been able to independently verify this data.

Company says it's 'acutely aware' it has to win business

Responding to the online boycott, a company spokesperson told CBC News that Loblawis "acutely aware"that it has to win its customers' business each day.

"The last few years have been tough for Canadians, and we continue to do what we can to combat inflation at our stores," the spokesperson saidin a statement sent on Tuesday evening.

"Customers are noticing, with more visits in our stores and many commenting in the same Reddit groups that they're getting real value at our stores, often the best across the industry."

WATCH | Nova Scotians boycott some Loblaw-owned stores:

Why these Nova Scotians say they won't shop at Superstore this month

6 months ago

Duration 1:55

Thousands of Canadians are boycotting grocery giant Loblaw this month to protest the cost of groceries. The company operates Atlantic Superstore, Shoppers Drug Mart and No Frills. Paul Palmeter has the story.

David Soberman, a marketing professor at the University of Toronto's Rotman School of Management, said those kinds of statements ring hollow with consumers who have watched their grocery bills go up.

"They think to themselves, 'Well, what that guy was saying and what I'm experiencing are two different things,'" he said.

Rather than talking about prices, "I think it'd be a lot more credible if they were to talk a little bit more about how they're trying to control costs, how they're working with manufacturers, farmers and producers to find out ways to try to stock their shelves and provide products more efficiently," said Soberman.