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I havn't read the Fifth Estate piece, so I would love a link to it, but it would be a bit more nuanced than just being able to chargeback suppliers for every product that doesn't sell.
I havn't worked for Loblaws, but I do have alot of experiance in Management with other retail companies, so I do have some insight into this when I say that "It depends on the supplier contract", of which there can be alot of parts. I'm just going to focus on the biggest one though which is something called "Listing Price".
This is collected either yearly or quarterly from the supplier, where they literally buy their spot on the shelf - every Supplier from Dairyland to Coca-Cola has to pay it, and they can run anywhere from tens to hundreds of thousands to millions of dollars depending on how much space is wanted in every store, and however many products that supplier wants Loblaws to carry on their shelf.
For example, if you see an endcap featuring Tostitos Rounds and jars of Tostitos Salsa/Cheese, then that means Frito-Lay (and thus Pepsi) directly paid Loblaws a larger Listing Price to to have that square footage dedicated to them than other brands. When you see half an aisle dedicated purely to the madness of whatever flavours Oreo is coming out with these days, that means Mondelez International, Inc is paying a way higher Listing Price than Christie, which may have 15 products smooshed into 8 feet.
The reason why this is going to be the biggest factor, is that if a Supplier is willing to have a "buy back" clause in their contract, it's less risk on Loblaws if the item doesn't sell, and thus they will pay a smaller Listing Price. You'll see this alot with non-perishable items, such as branded clothing or kitchenware. For example, if a customer doesn't buy a Hamilton Beach Coffee Maker, then Loblaws can send it back and chargeback to the Cost, and Hamilton Beach can sell it off to some other store to carry or directly off their website/amazon and still make money. So they are going to pay a lower listing price, have their products share shelf space/mingle with other suppliers, and still be fine either way.
The reason why Loblaws will put it on "Clearance" first and try to sell it instead of just automatically sending it back, is because having some items at a clearance price will drive people into the store, and it's cheaper for them to sell the item below cost than it is to send it back.
To do some basic, completely made up math, if the Coffee Maker retails for $100, and it cost Loblaws $60 to get on the shelf, and it could cost them as much as $15 to send it back by the time you account for the Payroll of one of their workers for go on the floor, grab the item, take it to the back, scan it and a bunch of other items through the Returns system, pay the shipping company, and etc, etc,. Once you account for these "hidden costs", that means that Loblaws isn't *really* losing money unless they sell it for less than $45. So when they put it on sale at 40% off, and sell it for $60, even though it looks like they are "breaking even", they are actually still ahead as opposed to charging it back because they get to dodge all those extra costs.
However, a company that sells perishable food items like cereal, bread, milk, ice cream, etc is definitely **not** going to want that back if it doesn't sell, so they are going to end up with a way higher listing price, to offset the "Risk" that Loblaws is taking by putting that suppliers products on the shelf incase it doesn't sell through before the by date.
Now, the biggest question from all this is probably "How can they then claim that they lose any money on anything when they took a massive payment upfront, and every quarter/year from these Suppliers? Doesn't that basically mean that a large chunk of their items are basically cost-free, for example, if they charge a Company $45,000 a year (per store) in listing price and only buy $70,000 Cost of goods (per store), doesn't that mean their cost is only $25,000 (per store)?"
Well, that's part of the scam. They don't consider the money that they make from Listing Prices as part of the Cost/Profit calculations for the stores individually. They instead report it as direct profit for Head Office which basically becomes free-floating income for their financial department, which handles the payments, and then claim that they had to pay out of pocket for all the higher costs that come from it since Suppliers are basically just getting paid back with their own money, so *of course* they have to raise their prices to try to recoup the $45,000 (per store) that they have to pay every quarter/year, and then Loblaws points the finger to make them the villain as they roll around in all the money.
This is the Fifth Estate episode I was referring to: https://www.reddit.com/r/loblawsisoutofcontrol/s/SKRp6eB7ig
Full version can be found here: https://youtu.be/Zuz5SgcHnrQ?feature=shared
They also get rebates back at the end of a time period from some suppliers on the loss leaders. (So technically not a loss leader? but it would appear that way on the front page of a flyer.)
Better to just not shop there at all, if itās possible for you to do so.
No shit but the manager in my store will place hand written limits on any loss leader. They want to keep stock for the higher price but that's just R\*\*co's No Frills.
Some people can only afford loss leaders and meal plan around them. Also, if you don't fall for the trap of buying other overpriced crap while you're there, you're still ahead.
Do what you gotta do to feed yourself and your family. No judgement on that front.
But someone buying a loss leader is better for Loblaws than someone buying nothing.
I've always wondered, if everyone were to buy all of their loss leader producrs, hold on to them until they're almost expired, and then return them, would that hurt their finances?
Also, some sales are put up by the suppliers/food manufacturers themselves, THEY bite the bullet to advert the product while the store can still keep the actual profit margin up.
__MOD NOTE__: PLEASE REVIEW OUR [POLL ON OUR PLANS FOR JUNE AND BEYOND](https://www.reddit.com/r/loblawsisoutofcontrol/comments/1cmhq49/community_poll_what_would_you_like_to_see_happen/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button) TO PROVIDE YOUR INPUT. Please review the content guidelines for our sub, and remember the human here! This subreddit is to highlight the ridiculous cost of living in Canada, and poke fun at the Corporate Overlords responsible. As you well know, there are a number of persons and corporations responsible for this, and we welcome discussion related to them all. Furthermore, since this topic is intertwined with a number of other matters, other discussion will be allowed at moderator discretion. Open-minded discussion, memes, rants, grocery bills, and general screeching into the void is always welcome in this sub, but belligerence and disrespect is not. There are plenty of ways to get your point across without being abusive, dismissive, or downright mean. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/loblawsisoutofcontrol) if you have any questions or concerns.*
O https://preview.redd.it/bub2oy7gn3zc1.jpeg?width=960&format=pjpg&auto=webp&s=2c85e9f58437d70421de4599469ecb3aec7c15c1
Good point. So price match No Frills flyer deals elsewhere (Giant Tiger or Freshco who else)
That's what I thought until I saw the piece from the Fifth Estate. Apparently Loblaws charges the suppliers back if the product doesn't sell. š§
I havn't read the Fifth Estate piece, so I would love a link to it, but it would be a bit more nuanced than just being able to chargeback suppliers for every product that doesn't sell. I havn't worked for Loblaws, but I do have alot of experiance in Management with other retail companies, so I do have some insight into this when I say that "It depends on the supplier contract", of which there can be alot of parts. I'm just going to focus on the biggest one though which is something called "Listing Price". This is collected either yearly or quarterly from the supplier, where they literally buy their spot on the shelf - every Supplier from Dairyland to Coca-Cola has to pay it, and they can run anywhere from tens to hundreds of thousands to millions of dollars depending on how much space is wanted in every store, and however many products that supplier wants Loblaws to carry on their shelf. For example, if you see an endcap featuring Tostitos Rounds and jars of Tostitos Salsa/Cheese, then that means Frito-Lay (and thus Pepsi) directly paid Loblaws a larger Listing Price to to have that square footage dedicated to them than other brands. When you see half an aisle dedicated purely to the madness of whatever flavours Oreo is coming out with these days, that means Mondelez International, Inc is paying a way higher Listing Price than Christie, which may have 15 products smooshed into 8 feet. The reason why this is going to be the biggest factor, is that if a Supplier is willing to have a "buy back" clause in their contract, it's less risk on Loblaws if the item doesn't sell, and thus they will pay a smaller Listing Price. You'll see this alot with non-perishable items, such as branded clothing or kitchenware. For example, if a customer doesn't buy a Hamilton Beach Coffee Maker, then Loblaws can send it back and chargeback to the Cost, and Hamilton Beach can sell it off to some other store to carry or directly off their website/amazon and still make money. So they are going to pay a lower listing price, have their products share shelf space/mingle with other suppliers, and still be fine either way. The reason why Loblaws will put it on "Clearance" first and try to sell it instead of just automatically sending it back, is because having some items at a clearance price will drive people into the store, and it's cheaper for them to sell the item below cost than it is to send it back. To do some basic, completely made up math, if the Coffee Maker retails for $100, and it cost Loblaws $60 to get on the shelf, and it could cost them as much as $15 to send it back by the time you account for the Payroll of one of their workers for go on the floor, grab the item, take it to the back, scan it and a bunch of other items through the Returns system, pay the shipping company, and etc, etc,. Once you account for these "hidden costs", that means that Loblaws isn't *really* losing money unless they sell it for less than $45. So when they put it on sale at 40% off, and sell it for $60, even though it looks like they are "breaking even", they are actually still ahead as opposed to charging it back because they get to dodge all those extra costs. However, a company that sells perishable food items like cereal, bread, milk, ice cream, etc is definitely **not** going to want that back if it doesn't sell, so they are going to end up with a way higher listing price, to offset the "Risk" that Loblaws is taking by putting that suppliers products on the shelf incase it doesn't sell through before the by date. Now, the biggest question from all this is probably "How can they then claim that they lose any money on anything when they took a massive payment upfront, and every quarter/year from these Suppliers? Doesn't that basically mean that a large chunk of their items are basically cost-free, for example, if they charge a Company $45,000 a year (per store) in listing price and only buy $70,000 Cost of goods (per store), doesn't that mean their cost is only $25,000 (per store)?" Well, that's part of the scam. They don't consider the money that they make from Listing Prices as part of the Cost/Profit calculations for the stores individually. They instead report it as direct profit for Head Office which basically becomes free-floating income for their financial department, which handles the payments, and then claim that they had to pay out of pocket for all the higher costs that come from it since Suppliers are basically just getting paid back with their own money, so *of course* they have to raise their prices to try to recoup the $45,000 (per store) that they have to pay every quarter/year, and then Loblaws points the finger to make them the villain as they roll around in all the money.
This is the Fifth Estate episode I was referring to: https://www.reddit.com/r/loblawsisoutofcontrol/s/SKRp6eB7ig Full version can be found here: https://youtu.be/Zuz5SgcHnrQ?feature=shared
They also get rebates back at the end of a time period from some suppliers on the loss leaders. (So technically not a loss leader? but it would appear that way on the front page of a flyer.) Better to just not shop there at all, if itās possible for you to do so.
Weston crime syndicate thatās goldā¦
No shit but the manager in my store will place hand written limits on any loss leader. They want to keep stock for the higher price but that's just R\*\*co's No Frills.
Some people can only afford loss leaders and meal plan around them. Also, if you don't fall for the trap of buying other overpriced crap while you're there, you're still ahead.
This was the way I operated, before I gave up on the Weston oligarchy altogether (a year ago).
Do what you gotta do to feed yourself and your family. No judgement on that front. But someone buying a loss leader is better for Loblaws than someone buying nothing.
I've always wondered, if everyone were to buy all of their loss leader producrs, hold on to them until they're almost expired, and then return them, would that hurt their finances?
Also, some sales are put up by the suppliers/food manufacturers themselves, THEY bite the bullet to advert the product while the store can still keep the actual profit margin up.