The executive board of Loblaws Companies has approved a 10 per cent pay raise, after referring to grocery mogul and billionaire president of Loblaw Companies Ltd., Galen Weston, as “underpaid.”
As the majority of Canadians continue to reel from inflation and the economic and social fallout of COVID, Galen Weston will receive an additional $1.2 million in compensation this year, bringing his yearly salary to $11.79 million. The verbiage “underpaid,” has been a confounding assertion for many. Given that the Weston family owns over 78 million shares (valued at $14 billion), and that Galen Weston himself owns stock options in Loblaws and George Weston is valued at over $40 million, using the word “underpaid” to describe Weston is nothing more than ludicrous hyperbole.
The announcement is terrible timing, given that Loblaw Companies Ltd. has been doubling down on repairing their public image as the mascot for driving grocery prices sky-high in recent years. In January 2023, Loblaws Companies published a series of tweets on the rising cost of groceries, and claimed “we get it. It’s easy to blame grocers for higher grocery prices. But on a $100 grocery bill, our profit is less than $4.”
Can you hear that sound? That is the world’s tiniest violin playing a mournful tune for the largest player in Canada’s grocery oligopoly and its seemingly insufficient profits. Scaling this figure up to actual sales, the Companies’ 2022 Q4 report shows that the company reported nearly $10 billion in sales in the last three months of 2022 alone, which brought in $529 million in profit for Loblaws with pharmaceuticals and food sales leading the charge.
Whether or not Loblaws feels the public’s mistrust is valid or not, this is not Loblaws’ first time making headlines for (allegedly) manipulating the market and driving food prices up. In fact, Loblaws was one of the named colluders in the Great Canadian bread price-fixing scandal; and did so with no legal ramifications despite the company’s 14 year involvement.
In 2018, the Canadian Competition Bureau found that between 2001 and 2015, bread, roll, and bun prices rose over 95 per cent. Additionally, StatsCan reported the Consumer Price Index for food purchased from grocery stores increased approximately 45 per cent. This outpacing of bread price increases relative to other increases was confounding. Informants from the Loblaws Companies supplied the Bureau with information. Subsequent discoveries found Weston Foods, a subsidiary of George Weston Holdings and sibling to Loblaws, was found by Canada Bread to have colluded on driving bread prices up substantially. This scheme undoubtedly came at the expense of Canadians. Not only did the named companies, (which included Weston Foods) admit to their part in driving up prices, it also strong-armed their competitors in the grocery sector to adopt price increases as well.
Were subsidiaries of George Weston Holdings subject to any punitive actions because of this? Not really. Weston Foods was granted immunity in the case in exchange for their co-operation in the investigation. Although in 2017, Loblaws announced it would give out $25 gift cards to customers who were angry that multi-billion dollar companies conspired to artificially inflate packaged bread prices for well over a decade. How thoughtful. To date, the Bureau has not concluded the case, nor laid charges against any of the other five companies who were complicit in the scandal, all of which maintain there was no wrong-doing.
Despite overall inflation rates stabilizing, Canada’s most punchable grocery industry mogul has received a $1.2 million raise amid ever-upward record profits. Despite the cooling of the annual inflation rate, it seems grocery prices continue to climb. With Loblaw Companies reporting record high profits in 2022, it’s interesting to note Weston’s quaint $1.2 million salary increase has not trickled down to front-line workers.
Considering all of the above factors, it is no wonder Loblaws Companies Ltd., and Weston himself, have become the face of corporate greed, and declining consumer trust in retailers during the ongoing cost of living crisis. Sympathy for the company’s tanking public image is in short supply; that kind of a raise can buy an awful lot of groceries.