Loblaw is weathering a storm of criticism after it used a promotional tactic that a small business advocacy group considers ‘harmful.’
No Frills, which is owned by the grocery giant, sent out a text on Saturday to its Ontario flyer subscribers encouraging them to “skip the line at the farmers’ market.”
An Ontario advocacy group for small businesses shared a screenshot of the text shortly after it was sent, calling on the supermarket to rethink its messaging.
“We have often stayed quiet about this company and their affiliate brands, but we won’t this time. This is an example of punch down marketing,” the Ontario Small Business Community wrote on Instagram on Sunday.
“Essentially, advocating not to support the very same farmers who fill their grocery stores. This is another attack on small businesses and local food producers. Who already, if they do work with large grocery corporations, are taken advantage of and left with thin margins,” the organization continued.
According to Loblaw, the text was meant to direct customers to its No Frills summer produce program which involves partnering with farmers from across the country to feature local and seasonal produce in its stores.
However, the national food retailer did acknowledge the flaws in its approach.
The company told Now Toronto in an email statement that it understands the “vital role,” these suppliers play in feeding Canadians, but that the “message in the text didn’t match the spirit of the campaign.”
“For this we sincerely apologize…we remain committed to supporting Canadian farmers and growers,” the company concluded.
The Ontario Small Business Community said it was the “subtext” of the message that was damaging to local producers.
“The reality is that advertisements like this are projecting the very issues that Loblaws’ consumers have voiced their concern and disdain for time and time again,” Victoria T, a community manager for the Ontario Small Business Community, said in an email statement to Now Toronto.
According to the advocacy group, the message pushes a false narrative around farmers’ markets by suggesting they experience levels of demand similar to national grocery chains that lead to excessive wait times.
“Assigning fault to a business model that has never experienced these consumer issues creates a negative narrative around these types of markets that simply does not exist,” Victoria T said.
Farmers’ markets provide a space for smaller and local producers to sell goods directly to consumers, Victoria T explained. However, the Ontario Small Business Community says the marketing tactic has potential to disrupt a trade mechanism that is designed to operate independently of corporations.
“Farmers Markets really do not compete in the retail or advertising space; it’s simply not how they do business. There are over 180 member Farmers Markets in Ontario alone, and all of them co-exist and operate in the greatest of harmony beloved across the country,” the organization said.
Loblaw and its various subsidiaries do sell produce from local suppliers, which includes businesses who sell at farmers’ markets.
“We can confirm that some of the local producers they purchase from do sell at local Farmers Markets. Specifically items like breads, sauces, condiments, beverages, pastries, produce and other Ontario made and Canadian made food products,” Victoria T said.
Despite this, stocking produce at large food retailers comes at a cost for local producers, who have to pay substantial sums for shelf space. These premiums often put local retailers at risk of bankruptcy.
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Additionally, many local suppliers sell to supermarkets wholesale; meaning big retailers pay much less per unit. And, because large brands have access to distribution channels that are helpful to local producers they leverage their position to negotiate wholesale prices, the Ontario Small Business Community explained.
The organization said it would also like to see food retailers pass on producer discounts to the consumer, provide better in-store signage indicating local products to help consumers make more conscious purchasing decisions, and highlight locally stocked producers in advertising campaigns.
