Matthew Lau: Activists' illogical boycott of Loblaw just doesn't add up

financialpost.com:

Some internet activists are calling for a boycott of Loblaw for the month of May over the grocer’s prices, which are said to be too high. The boycott is not notable for its logic. On the one hand, if the boycotters are not Loblaw customers to begin with, it’s meaningless. On the other hand, if they are current customers, it must be because they have decided Loblaw’s offering — its combination of price, quality, selection, convenience and other factors that determine shoppers’ choice of grocer — is better than all the other alternatives. Which makes Loblaw an odd target for a boycott over its prices.

Indeed, in reply to the boycotters, some online posters have said they will not participate “because there’s no viable alternative” where they live and “the other grocers in town are even more expensive.” An Ottawa woman with two young children says she needs “as few stops as possible” and it is No Frills (a Loblaw subsidiary) that provides that convenience; a man from Wallaceburg, Ont., tells CBC that boycotts are for people with financial privilege and excess leisure. Only activists with surplus money and time can spend more of both to make a point.

The activists’ initial list of demands began with an immediate 15 per cent price reduction, but for all the groaning about Loblaw’s supposedly outrageous profits and profit margins, its just-published financial statements for the first quarter of 2024 show its net earnings available to common shareholders were less than 3.4 per cent of revenue. Low single-digit profit margins are typical of the grocery industry and have been generally stable over time. How a grocery company with a 3.4-per cent profit margin can drop prices by 15 per cent and stay in business selling groceries,