Loblaw boycott had ‘minor’ impact on sales, CEO Per Bank says
The boycott of Loblaw stores in May had only a “minor” financial impact on Canada’s largest grocers, according to the company’s CEO.
Loblaw Co. Ltd. reported second-quarter earnings on Thursday, including the month of May, which saw the grocer targeted in a grassroots boycott campaign venting frustrations over rising grocery prices.
Loblaw CEO Per Bank was asked about the impact of the movement during an earnings call accompanying the earnings. He said “the overall financial impact was minor.”
Chief financial officer Richard Dufresne acknowledged that the boycott had “a bit of an impact in certain stores in specific markets.”
“That said, at the end of the quarter, things had returned to normal,” he said.
The company missed analysts’ revenue expectations for the quarter, with same-store food sales up just 0.2 per cent.
Dufresne attributed the softer-than-expected sales in part to the company lapping a much stronger growth quarter a year ago, when same-store food sales rose 6.2 per cent.
He also said the “extremely hot” temperatures in May 2023 fuelled a boom in the company’s outdoor and gardening segments, while a comparatively cold and rainy season this spring dampened sales here this past quarter.
Loblaw said the decline in front-store same-store sales was primarily driven by lower sales of food and household items and the decision to exit certain low-margin electronics categories.
Canadian consumers have been trimming expenses even on essential items as high housing costs and interest rates continue to eat into their income.
The country’s retail sales fell in May mainly due to a drop in sales at supermarkets and grocery retailers, according to Statistics Canada.
Meanwhile, overall revenues rose but Loblaw took a hit to
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