Published On: Fri, Jan 12th, 2018

How to make Loblaws pay the most with your $25 gift card

The bread aisle at a Loblaws in Toronto. (Carlos Osorio/Toronto Star via Getty Images)

Bread buyers are angry, and rightfully so. Last December, Loblaw Co. confessed to operating a price-fixing scheme on bread with its parent company George Weston Ltd. Between 2001 and 2015, Loblaw grocery retailers and Weston bakeries controlled price increases on the household staple, effectively costing Canadians as much as $ 400 over its 14 years of fixing prices—and that’s if you buy just one loaf per week.

Now, amid Breadgate, the company is offering consumers meagre compensation in the form of $ 25 gift cards that can be redeemed at Loblaw-owned retailers. As of Jan. 8, shoppers can register online for the free credit, a gesture by Loblaw to make up for its actions. Many consumers say that $ 25 is not nearly enough to make up for the bread prices they’ve had to endure for over a decade, as is evident from the number of class actions propping up across the country.

Still, the gift cards are there for those who want them. And for those who feel cheated, there are ways to put them to good use—or, if you prefer: to take Loblaw to the woodshed. But to get your due, there are some grocery products consumers should buy, and some they should avoid. A few helpful tips:

Start from the margins

Inside a Loblaw store, products along the periphery usually have the highest gross margins, and therefore produce the most profit. If you’re shopping with the store’s own money, those are the ones you want to buy.

What to purchase

It varies by retailer, but the high-margin products are generally understood to include produce, meat, baked goods and the pre-made meals most stores now showcase as soon as shoppers walk in—the stuff that grabs your attention.

Think like a grocer

Stores also make margin on bottled water, greeting cards, cereal and, in general, products that are strategically shelved at eye level.

When you’re playing with house money, avoid house brands

By spending your $ 25 on President’s Choice and No Name, the company’s house brands, says George Condon, a consulting editor at Canadian Grocer, “you’re supporting Loblaws.” Both of these brands carry high margins, particularly because, unlike other brands, they come with limited marketing costs and are seen more rarely in television commercials, Condon explains.

President’s Choice is the largest food brand in the country and sells more than 3,500 different products in stores like Loblaws, Zehrs, Real Canadian Superstore, No Frills and Shoppers Drug Mart. It was founded in the 1980s and properly named for being the brand of “choice” by Dave Nichol, the president of Loblaw at the time.

In the centre of a Loblaw store are the canned goods and packaged foods that rake in the least profit for the retailer. Keep in mind that grocers in Canada don’t make a lot of money: Condon estimates that they only make about one or two per cent in profit at the end of year.

For Sylvain Charlebois, a professor in food distribution and policy at Dalhousie University, the best way to get back at Loblaws would be to go into the centre aisles and buy products that aren’t President’s Choice and No Name. “The last thing Loblaws wants to do is sell brands they don’t own,” he says.

Or.. give to those hurt most by price-fixing

Charlebois recently registered for his $ 25 gift card. When he receives it a few weeks from now, he won’t be boycotting Loblaw brands. Instead, he says, people “should give it to charity.”


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How to make Loblaws pay the most with your $25 gift card