Canada’s Largest Grocer Ending 50% Discounts on Expiring Items

File photo of a Loblaws grocery store in Toronto. (The Canadian Press/Nathan Denette)

Loblaw customers who relied on 50-percent-off deals to make their grocery money stretch a bit further will now have to make do with a smaller discount.

Loblaw Companies Ltd. has changed its policy on expiring items and will no longer offer 50 percent discounts on perishable foods. As of this week, the maximum shoppers can expect is 30 percent off of meat, fruit, and vegetables that are nearing their expiry date.

While the grocery chain—which owns Loblaws, No Frills, Valu-Mart, Your Independent Grocer, and Zehrs—did not publicly announce the new policy, it confirmed the pricing change to Dalhousie University’s Agri-Food Analytics Lab.

“Historically, our stores offered discounts ranging from 30 percent to 50 percent on ‘serve tonight’ type products. We are now moving toward a more consistent and predictable pricing strategy, aligning ourselves with our competitors,” Loblaw reportedly said in an email responding to questions from the lab.

The company said it would continue to offer a variety of discounts through in-store promotions as well as through the Flashfood app, which provides “deep discounts” on grocery items nearing expiration.

Lab director Dr. Sylvain Charlebois, in a column for Sun Media, said the policy is being implemented in all stores across the country, adding that the company may not have taken public perception into account when developing its new pricing strategy.

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“The culture within the industry seems to have normalized the co-ordination of prices across competitors without admitting to it—say, akin to an alcoholic in denial about having a problem,” Dr. Charlebois wrote. “In a free market, the focus should be on finding innovative ways to remain competitive rather than simply mirroring the competition. Canadians expect more from their grocers.”

He noted that the pricing change is unlikely to lead to more food waste because items nearing expiry will instead “be sold through other channels.”

“What Loblaw is doing, however, is preventing more consumers from focusing exclusively on discounted items at the periphery of the grocery store, where the more profitable fresh goods are located,” Dr. Charlebois added.

Food Price on the Rise

The cost of groceries has had a big impact on Canadians’ wallets over the past two years, thanks to food inflation. While prices are not expected to rise as much this year, they will continue to increase.

Canada’s 2024 Food Price Report, released last month by the lab, predicts the price of groceries will increase by an average of $701.79 per family of four this year.

An end-of-year report from the Agri-Food Analytics Lab found that most families plan to cut back on food spending this year. One of the chief ways they will do that is by changing their food shopping habits.

A total of 43.3 percent of those polled say they will actively look for promotions in the new year to cope with higher food prices, while 34.6 percent will use more coupons and 33.6 percent will use loyalty programs more often. A total of 30.6 percent say they will shop at different stores to get better deals.

What Canadians buy will also be impacted by the rising cost of food, with many saying they will cut back on particular products, the survey found. Snacks and convenience foods are the No. 1 choice for cutbacks in 2024, with 43.2 percent saying they will buy less of both.

Meat and alcohol are also on the chopping block, according to the report, with 30.5 percent and 28.2 percent respectively saying they will limit the amount they purchase. Fish and seafood are next on the list at 16.3 percent, followed by fresh produce and dairy products, which both came in at 12.9 percent.