Did Loblaw mess up its response to price freeze and consumer complaints?
There are many creative PR concepts discussed in corporate boardrooms, but we don't always hear about them, as few actually make it to the level of execution.
One concept that did make the cut, as well as extensive media headlines, was Loblaw Canada's decision to freeze prices on all No Name products in a self-proclaimed effort to help Canadians who were going through hard financial times as they dealt with the effects of high inflation and post-COVID economic factors.
Loblaw President and Chairman Galen Weston made the announcement on various social media platforms in the fall of 2022, and the story was covered extensively by Canadian media.
At the time, I had a negative feeling about what was to come. Did the company consider how long this changing economy would affect Canadians and how they would manage the eventual end to the price freeze?
At the end of January, it was confirmed that the price freeze was ending. Canadian consumers did not take this well, and Loblaw seemed unprepared, or simply poorly prepared, to manage their discontent.
Some Canadians could not understand how the country's largest grocery chain could initially get around the inflated prices of their suppliers when it resulted in positive PR and were now claiming that they could not manage the price hikes from suppliers.
It did not help that Loblaw reported a significant increase in sales and profits amid the inflation.
Here are a few PR mistakes that, if managed differently, could have reduced the extent of the company's reputation damage.
A company never wants to seem defensive online, especially one that makes millions of dollars while the average consumer is struggling to fill their grocery cart with much-needed food for their families.
Loblaw complained about “becoming the face of food inflation” while blaming suppliers for the issues they are facing. Empathy, accountability, and concern for the consumer would have been a much better tone for leading this dialogue.
Benefiting from the initial PR but not seeming authentic in their efforts to help Canadians during tough times.
We froze prices to help customers at a time they needed it most and we did something to fight inflation. It meant something to Canadians— Loblaw Companies (@loblawco) January 31, 2023
Although the gesture of freezing prices may have been well intended, the current state of the economy, and the financial reality of the average Canadian, is still poor and perhaps even worse now than when the price freeze was announced.
This gave some consumers the impression that the price freeze was just a PR move and not an authentic gesture of support. A potential solution would be a slower return to market prices with empathy for the customer leading the tone of all online conversations.
Loblaw was questioned by the media about their recent increase in profits. Throughout dialogue with the media, and the public, there seemed to be a lack of transparency regarding their profits and where they were coming from.
When there is confusion and a lack of transparency, consumers lose trust in a brand, which is always a negative outcome for a company and its long-term reputation.
When customers are postings online about paying $37 for a 5-pack of chicken breasts at Loblaw, and other high prices for products on the store’s shelves, it’s clear that grocery bills are incredibly high. This does not align well with the brand complaining about becoming the face of food inflation.
The language used in much of the online communications from Loblaw over the last several days seemed selfish and full of excuses. A brand should always show concern for the customer first.
The challenges Canadians are facing financially seemed to be lost in the conversation, while reasons as to why it is so tough being Loblaws dominated.
Loblaws made a bold move in freezing their No Name product prices, but in doing so, they benefited from positive PR and experienced an increase in sales and profits. They now seem unwilling to accept criticism and show authentic empathy for average Canadians who are having trouble putting food on the table during uncertain economic times.
Posts with wealthy company owner Galen Weston, and tweets that are insensitive to customers, mixed with not accepting accountability for their role in the jump of grocery prices at their stores, all equal a PR crisis.
This was likely not a part of the boardroom discussions, as the rollout of this PR move was designed last year. Maybe it should have been.
This article was originally written for Daily Hive by Rachel Thexton, president of Thexton PR.
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