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🛍️ laying down the loblaw

The Westons might be Canada's Bezos

Vass Bednar
Nov 27, 2020
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🛍️ laying down the loblaw
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Are the Westons Canada’s Bezos OR did Amazon scoop Loblaw’s lead on Canadian consumers?
Twitter avatar for @s_m_i
stacy-marie ishmael @s_m_i
We really need better reporting on monopolistic behaviour
3:15 PM ∙ Nov 25, 2020
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*If so, why were they asleep at the e-commerce wheel?
Twitter avatar for @Kat_LeBlanc
Kathryn LeBlanc @Kat_LeBlanc
Irving, Loblaws, and Sobey’s.
Twitter avatar for @JoyceWhiteVance
Joyce Alene @JoyceWhiteVance
What are the three branches of government? [Wrong answers only]
1:13 AM ∙ Nov 14, 2020
1,016Likes111Retweets

I think that the way(s) Loblaw can leverage customer data could be of interest to regulators.

Twitter avatar for @BNNBloomberg
BNN Bloomberg @BNNBloomberg
Torstar sells digital marketing technology developed by subsidiary to Loblaw bnnbloomberg.ca/-1.1528104
Image
1:32 PM ∙ Nov 26, 2020
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The firm also displays many of the hallmarks that have come to characterize large technology companies like Amazon and Google.

Twitter avatar for @Lefty_Mind
Shelby @Lefty_Mind
No Frills parent company is Loblaws, which is owned by the Westons who have a net worth of $9.2 BILLION. Which, increased by $1.6 BILLION during the PANDEMIC. They can MORE than afford to pay there workers a fair wage, and they just choose not to 🤷‍♀️
6:07 PM ∙ Oct 8, 2020
1,923Likes632Retweets

What IS Loblaw, other than “grocery stores and Shoppers?” I’ve taken the below from a recent press release, which helps to set the baseline for the scale of the firm.

About Loblaw Companies Limited (TSX: L) 

Loblaw Companies Limited is Canada's food and pharmacy leader and the nation's largest retailer. Loblaw provides Canadians with grocery, pharmacy, health and beauty, apparel, general merchandise, financial services, and wireless mobile products and services. With more than 2,400 corporate, franchised and Associate-owned locations, Loblaw, its franchisees, and Associate-owners employ approximately 200,000 full- and part-time employees, making it one of Canada's largest private sector employers.

Loblaw's purpose – Live Life Well® – puts first the needs and well-being of Canadians who make one billion transactions annually in the companies' stores. Loblaw is positioned to meet and exceed those needs in many ways: convenient locations; more than 1,050 grocery stores that span the value spectrum from discount to specialty; full-service pharmacies at nearly 1,400 Shoppers Drug Mart® and Pharmaprix® locations and close to 500 Loblaw locations; PC Financial® financial services; affordable Joe Fresh® fashion and family apparel; and three of Canada's top consumer brands in Life Brand®, no name® and President's Choice®.

In a lot of ways, the Loblaws family of companies could be considered just as ambitious, predatory and worrisome as Amazon. Also - let’s not forget the great bread price-fixing scheme of 2017, which Loblaw admitted it participated in for 14 years (!). 

Most recently, the Westons have been making headlines for their opposition to an increase in the minimum wage despite posting record profits in the pandemic (according to Forbes data, Weston’s personal fortune increased by ~$1.6 billion).   

📢 Here’s why policy people should add Loblaw to the same conversations we have about Amazon and Google regarding antitrust, consumer protection, “Green New Deal,” etc.

Share regs to riches

1 - low wages, high earnings 

This combination has become a hallmark of sorts among the largest tech companies - especially Amazon. If companies could patent it, some would. 

Twitter avatar for @jacobinmag
Jacobin @jacobinmag
The Westons, owners of retail giant Loblaws, are leading the fight against decent pay in Canada. Having profited during the pandemic while working people faced hunger and eviction, the family is now fighting to deny labor any share of the gains.
jacobinmag.comFor the Owners of Loblaws, Ripping Off Canadian Workers Is a Family BusinessThe Westons, owners of Canadian retail giant Loblaws, are leading the fight against decent pay in Canada. Having profited during the pandemic while working people faced hunger and eviction, the family is now fighting tooth and nail to deny labor any share of the gains.
4:48 PM ∙ Oct 5, 2020
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When the wages of the workers that form the foundation of a company (cashiers and warehouse workers) are suppressed while a firm posts record profits, this tends to be a key indicator of wealth consolidation and a bad bargain for workers. While Galen Weston has suggested he supports a living wage, he doesn’t pay one - and people are noticing.

Twitter avatar for @MarkPi
Mank PiersciaMASKi @MarkPi
If you are suggesting that No Frills workers shouldn't get paid a living wage because it would marginally increase the cost of your groceries, consider that maybe your groceries don't have to cost more if Loblaws just pays Galen Weston Jr. less. He's worth around $8 billion.
2:26 PM ∙ Oct 8, 2020
2,297Likes680Retweets
Twitter avatar for @d_ylan7
Dylan🌹BLM @d_ylan7
Loblaw (owner of #NoFrills): - Admitted to 14-year bread price-fixing scheme - Ordered to pay $368 million in taxes hidden offshore - Accepted 12 million federal $ for new fridges - Galen Weston worth 8.2 BILLION - Pandemic profits skyrocketing Pay your fucking workers #cdnpoli
6:19 PM ∙ Oct 8, 2020
1,142Likes375Retweets

The company also has uneven unionization. In the past, Loblaw has argued that Shoppers stores should not be automatically certified because the stores are franchises and not corporately owned, and not operated by Loblaw.

Twitter avatar for @anjelafreyja
Anjela Freyja @anjelafreyja
@JesseBrown would love for Canadaland to share more info on the Loblaw's protests in NFLD. Workers striking for over 2 months for fair wages. Loblaw's refusing to co-op. Workers make $11.75/hr, 0 benefits. This deserves more media attn. than it's been getting from CBC/CTV.
9:35 PM ∙ Oct 25, 2020

2 - use of data 

In a Canadian context, Loblaw comes close to being a digital titan from a data wealth perspective. They’ve had a fairly sophisticated digital loyalty program (PC Optimum) since 2013, which they are now (presumably) preparing to integrate with health and banking information.

Twitter avatar for @BJMcP
Brenda McPhail @BJMcP
Can’t wait to read the privacy policy for this: Loblaw to refer shoppers to health services, ties loyalty points to wellness behaviours
theglobeandmail.comLoblaw to refer shoppers to health services, ties loyalty points to wellness behavioursThe company’s new PC Health app is a partnership with Canadian digital health startup League, and part of a larger multimillion-dollar strategy
5:50 PM ∙ Oct 15, 2020
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⛵ *The thing is, the PC Privacy ship has long sailed. There are other issues we should  concerned about - like, why are we normalizing downloading responsibility for an individual’s health to the individual, or wasting[?] tax dollars on a broken archaic single payer health system that simply needs to be revitalized?

Knee-jerk concerns about individual privacy obscure the creeping privatization (and worse - gamification) of public health. 

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When it comes to consumer data harvested through a rewards program - Loblaw seems to be making a late-game pivot of sorts. They were an early leader in data collection and seem to be figuring out how to stay relevant and dominant; I can’t tell whether they are expanding their empire or just experimenting in the finance/banking and health spaces because... they can.

Twitter avatar for @heylolo
Lauren Steinberg @heylolo
Soft launch 🤫 Congrats to the @loblawdigital team for another 🚀 ➡️ shoppersdrugmart.ca Fulfilled by robotics. Shipped directly to your doorstep. Everything you love about Shoppers, now online. Want to come build the next one with us? loblawdigital.co/careers
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4:44 PM ∙ Oct 6, 2020
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3 - health tech

Their latest foray into our lives is PC Health, powered by League - which is ostensibly an insurance company. This will potentially enable the PC family to link up health data paired with grocery and pharmacy spending, and even further enriching a user’s profile with their banking history. PC might even know whether you booked a flu shot. 

Twitter avatar for @unbrelievable
Breanna Hughes @unbrelievable
The cat is finally out of the bag! It’s been great working with the Loblaw team on making healthcare more accessible to Canadians. Currently the PC Health app is only available in Atlantic Canada (coming soon to all of Canada!)
newswire.caLoblaw works with League to help transform how Canadians access and navigate healthcare through the launch of PC Health app/CNW/ - Loblaw Companies Limited (TSX: L) (“Loblaw”) announced today the launch of the PC Health app, an innovative solution to provide Canadians access to...
1:55 PM ∙ Oct 15, 2020
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4 - digital banking 

Did I mention that Canada’s top grocer is getting even more into the banking game? Their new banking solution, the PC Money Account, rewards you for your everyday spending - incentivizing those transactions with “points.” This enriching data set could allow the company to build a much more fulsome profile of you as a consumer. For instance, this information can help them figure out what ads to serve you, what discounts to offer you, what your price sensitivity is, and even what products to stock at your nearest No Frills (etc).

Twitter avatar for @VassB
Vass Bednar @VassB
I can't WAIT to give Loblaw ALL my banking data so that I can get the best rewards EVER 😟theglobeandmail.com/business/artic…
theglobeandmail.comLoblaw moves back into banking three years after cutting ties with CIBCPC Financial will try to rebuild base of deposits without a partner after two million clients were moved to Simplii Financial in 2017
8:55 PM ∙ Sep 14, 2020

5 - autonomous vehicles 

This evolution - the recent partnership with Gatick - seems inevitable. It’s also disconcerting from a future of work perspective, as we watch automation erode employment.  

Twitter avatar for @BetaKit
BetaKit @BetaKit
Loblaw partners with Gatik to bring first autonomous delivery fleet to Canada.
betakit.comLoblaw partners with Gatik to bring first autonomous delivery fleet to Canada | BetaKitLoblaw Companies Limited has signed a deal with Palo Alto-based startup Gatik to launch what it claims is Canada’s first autonomous delivery fleet.
11:00 AM ∙ Nov 23, 2020

Exhibit 6 - competition bureau 

Let’s be real, Loblaw has also run afoul of the Competition Bureau (*many times). They’ve also recently caught the eye of the CRA (Canada Revenue Agency). 👀

Twitter avatar for @CarmichaelKevin
Kevin Carmichael @CarmichaelKevin
The federal government is one step away from a big win in its effort to squeeze offshore tax dodging. Latest development in the Loblaw-vs-CRA contest, via @GeoffZochodne, who has been doing great work on this story:
financialpost.comSupreme Court to settle Loblaw offshore tax case that feds say risks $1 billion in revenue‘We continue to believe that we have been fully compliant in our tax filings,’ Loblaw says
11:47 PM ∙ Oct 29, 2020
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🤷‍♀️ What’s the strategy here?

🇨🇦 Is it good for Canadians?

👔 Is Loblaw a Canadian “Amazon”?

Both firms have massive scale, and have the power to squelch competition both upstream and downstream. You can connect that back to my earlier point on workers’ wages: Loblaw can squeeze both suppliers and workers.  

Then it comes back to scale, and taking up so much of the market for “essentials.”

🗣️ Predatory tactics are not new for grocers or big box retailers, but when these legacy corporate entities add the sheen of a tech frontier mentality, regulators need to see it for what it is: the exploitation of working class Canadians.

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We *could* think of Loblaw as a Canadian technology company because of their incredible predictive power.

I got some pushback online for suggesting that on Twitter - when is a toaster just a toaster? Great question.

Twitter avatar for @mayashoucair
Maya @mayashoucair
@tron @VassB @loblawdigital Here's a question: is a toaster with bluetooth tech or is it a toaster or does it matter? Or is just the software that is embedded into the toaster the tech? I'm spiralling here lol but I feel like we need to define these things better, someone must have already?
7:08 PM ∙ Nov 23, 2020

The data-fication of companies puts them in a “tech” category. For me, any company that leverages data to manipulate consumer behaviour can count as tech. 

So when my toaster rewards me for eating toast, gets me discounts on buying toast, and know how much I spent on toast (and everything else), and can tell other companies my toasting habits, then it’s a tech company, or a “data” company, or whatever classification people need to stop and say: what’s going on over here?

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But it doesn’t really matter if they are or aren’t [“a tech company”]. What matters is that we’re able to spot these tactics, think about them, and regulate the company accordingly.

*Recently, Douglas of Betakit challenged me to think about the “darkest future” for technology. I think that’s a good mindset to try and anticipate harms on the horizon.

So here’s a bet: in the near future, PC Optimum could incentivize data sharing with the new data portability opportunities in C-11 (An Act to enact the Consumer Privacy Protection Act and Personal Information and Data Protection Tribunal Act and to make consequential and related amendments to other Acts) that could unlock open banking. I’m sure we’ll see “bonus” points for porting over your banking data (as we saw rewards points for booking your flu shot online). 

I also have nightmares about dynamic digital pricing.

Further, the company’s track record re: data isn’t all that great. In 2019, the Privacy Commissioner of Canada determined that Loblaw Companies Ltd. initially collected more personal information that it needed with respect to the $25 gift cards it made available to customers affected by the bread price-fixing scheme in which Loblaw participated.

Why should you care about Loblaw’s digital evolutions if you are “into” the startup scene? 

Perhaps it comes down to whether you believe that a company can both “do good” for the consumer AND harm them.

Ultimately, I believe that our scholarship suffers (severely) when we simply replicate global conversations about regulating big tech. It’s lazy.

We can and should continue to learn from the tech examples we have in our backyard alongside global models. Given their engagement across grocery, pharmacy, and financial markets as well as their market dominance and ability to set prices, Loblaw is wholly deserving of our scrutiny and interrogation. It’s not hard to imagine where the company is trying to go with this growing portfolio, and I’d rather anticipate it than admire it later and wonder if it can be undone. 

🎤 If we can’t “get it right” with *our* largest technology companies, it seems unlikely that the country will effectively regulate the tech titans.

Loblaw in 2020 is Amazon circa 2012.

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Jackie Lu
Nov 27, 2020Liked by Vass Bednar

👏🏻 this was a super great issue - so much love for the clear call-to-action to look beyond the "tech companies" that dominate the discourse.

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Matt Elliott
Writes City Hall Watcher
Nov 27, 2020Liked by Vass Bednar

Hey I like your newsletter. Other thing about Loblaw that I think deserves more scrutiny is how many pretty sweet gov deals they have. Shoppers is your neighbourhood post office, the place you go to add money to your Presto card, where you go to buy Toronto garbage tags, the place you get your flu shot (and maybe COVID vaccine?), etc. All government contracts that make it harder for smaller or newer players to compete.

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