Loblaw Price Freeze Survey |  Effective campaign, flawed reasoning

Loblaw Price Freeze Survey | Effective campaign, flawed reasoning

The campaign to freeze prices for 1,500 Sans nom brand products in Maxi and Provigo, strongly criticized by many observers who saw it as a simple marketing ploy, has obviously hit its mark. More than half of Canadian consumers are convinced that this initiative has the effect of lowering their grocery bill. However, flawed reasoning warns experts.

The price freeze announced by Loblaw in October saves money at the supermarket, say 65.2% of consumers in the country. At least that’s what a report released Thursday by Dalhousie University’s Agri-Food Analytical Sciences Laboratory reveals, following a survey of 5,530 respondents.

According to the survey, “47.5% of Canadians intend to buy more No-Name labeled food products than they normally would because of the price freeze.” In Quebec, 53.1% of respondents expressed this intention.

However, putting the famous products known for their yellow packaging in your basket, instead of opting for other brands, does not necessarily mean that you save money, stresses Christian Desîlets, professor of advertising at Laval University.

Consumers have taken “a cognitive shortcut that I was tempted to take” but is still wrong, argues Christian Desîlets. “What consumers took away was that Maxi was making an effort to lower prices. In French, they translated it as: “It will cost less.” »

“A price freeze means that we will stop raising prices for a certain period,” adds Mr. Desîlets. But No Name brand products are not always necessarily cheaper than other private or national brands, whose prices vary depending on the promotions offered.

Last week, for example, No Name white cheddar (400g format) was $5.99, while the same brand, the President’s Choice brand – whose prices are not frozen – was $5.49. On the Metro side, the same Sélection brand cheese was also advertised for $5.99.

This reasoning of consumers also “surprised” Sylvain Charlebois, director of the Laboratory of Analytical Sciences in Agrifood. “Actually, if there is a price freeze, that does not mean that it is cheaper,” he also recalls.

“Freezing Maxi’s prices means trying to keep growing by attracting more consumers to its in-house products instead of letting them go to national brands,” adds Christian Desîlets. Of course, this is not good news for competitors, he argues. I have the impression that they will react. What the other chains will take into account is that the freezing of prices is interpreted by the population as a drop. »

However, other brands such as IGA and Metro will not venture into the realm of price freezes, believes Sylvain Charlebois, who points out that they do not have the same business model as Loblaw. However, the specialists consulted believe that the price freeze campaign could restore the image of all private brands, perceived as less expensive.

Lowest Price Guarantee

In addition, the report also shows that “64.4% of those surveyed believe that [la politique du prix le plus bas] it is a better strategy than freezing prices for a fixed period.”

“This is where we could see a cartel backlash against the Loblaw freeze,” says Mr. Charlebois. A low price guarantee is anytime, there is no time limit. »

However, this guarantee is not offered everywhere. In April, an article published in Press reported that Loblaw had seen “a sharp increase in the number of people taking advantage of the Unbeatable program.”

The principle is simple: “If a customer sees a cheaper advertised product elsewhere, we’ll match the price,” said Johanne Héroux, Loblaw’s senior director of corporate affairs and communications.

The consumer must then provide proof (circular, photo) that the item is less expensive at the competitor.

On the IGA side, the policy does not apply to all products. ” Either [un concurrent] If you offer a lower price on any item we display on a flyer with an “Unbeatable Price” badge, we will sell you this item for 1 cent less than the competitor’s current price upon presentation of the competitor’s flyer or your invoice”, can we read on the brand’s website.

Metro does not offer this type of guarantee.

Remember that the price freeze in Maxi and Provigo will end on January 31, 2023.

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