High grocery prices during a period of inflation. A public perception that greedy executives were profiting off consumers who were struggling financially. Suspicions of price fixing. Grass-roots boycotts. Supermarket titans seemingly out of touch with public concerns.
While these sound like the current issues surrounding Loblaws, such accusations and actions aren’t new for Canada’s biggest grocer. Back in 1966, these factors affected Loblaws and other major supermarket chains, resulting in federal hearings on consumer pricing and public protests that wound up revealing a lot about the secretive Weston family empire.
Garfield Weston did not serve his businesses well in terms of public perception. He became president of the family baking business following his father’s death in 1924. Over the following decades, he expanded the holdings of George Weston Ltd. across North America and the British Empire, gaining gradual control of Loblaws Groceterias during the 1940s and 1950s.
By the 1960s, he was viewed, as Charles Davies observed in his book Bread Men, as “an aloof, headstrong, and highly paternalistic industrialist.” He was, Davies writes, “a restless and somehow unfulfilled man who kept buying companies and moving house because he couldn’t bear the thought of keeping still.” He was intensely private, disclosing little about the inner workings of his holdings — and he didn’t appreciate his growing image as a profit-hungry tycoon. Extremely conservative in his outlook on life, he often used corporate annual general meetings as a platform to praise traditional values he felt were being lost, such as idealism, loyalty, and hard work.
Ad from the August 17, 1966, edition of the Toronto Daily Star.
He generated controversy at the 1964 Geoge Weston Ltd. AGM when he defended South Africa’s apartheid policies, saying that it was ludicrous to give voting rights to “millions of coloured men whose morals are not ours and whose Christian ethics are completely absent.” His use of racial slurs in speeches led African students at the University of Toronto to contemplate boycotting his stores. In early 1966, he defended his increasing investments in Rhodesia (present-day Zimbabwe), despite a growing number of international sanctions against the white-minority government there, saying it was “a great country with a united, great-hearted people.”
But 1966 would bring a different set of problems. Inflation, especially food-related, was a hot political issue. Though lower than what Canadians would experience during the 1970s, price increases were high enough to anger consumers, who suspected that corporations were taking advantage of the situation, especially as similar items went for lower prices in the United States. Allegations of price fixing among the major supermarket chains were increasing. At the same time, supermarkets offered numerous promotional schemes, ranging from trading stamps to games and lotteries, which likely weren’t cheap to operate.
Article from the October 20, 1966, edition of the Toronto Daily Star with photo of Loblaws president G.C. Metcalfe.
In Loblaws’ case, corporate secrecy didn’t help its image. Weston’s number two executive, George Metcalf, shared Garfield’s secretive nature. Attempts to seek information from Metcalf, the president of Loblaws Groceterias and holder of numerous other posts in the Weston empire, usually resulted in a pleasant but evasive response. Few brokers recommended Loblaws stock to their clients due to the secrecy, and some threatened to boycott it unless more information were provided.
The investment community was full of “Westonologists” who tried to untangle what exactly George Weston Ltd. owned or had major financial stakes in. Most Westonologists agreed on three things: that Garfield Weston was a genius at making food products, that the real profits were exaggerated by including items such as capital gains and deferred taxes, and that he was trying to consolidate the empire.
Article from the October 21, 1966, edition of the Toronto Daily Star.
In fall 1966, these factors, combined with growing consumer anger, led to the expansion of a joint House of Commons and Senate committee co-chaired by Senator David Croll (a former mayor of Windsor, provincial cabinet minister under Mitch Hepburn, and Canada’s first Jewish senator) and Ron Basford (a Vancouver-area MP and future Pierre Trudeau cabinet minister). Originally focused on investigating consumer credit, it would now also look at pricing. Between September and December, the committee heard testimony and received briefs from all levels of the food industry. It called 16 grocery chains to testify, starting with A&P, which revealed a survey showing that, on a range of more than 2,000 items across major Canadian chains, Loblaws charged the highest price for 63 per cent of them.
As the hearings got underway, local groups — primarily consisting of housewives — formed across Canada to protest prices. Among the earliest was the Ottawa Consumers’ Protest Association, which began a two-week boycott of chain supermarkets in the capital region on October 5 and was supported by local labour organizations. The organizers received inquiries from across North America as boycotts began spreading into major American cities. Participation in Canadian boycotts was estimated at up to 20,000 in the Ottawa area and up to 200,000 in Montreal.
Article from the October 20, 1966, edition of the Toronto Daily Star.
On October 20, a 10-man delegation from Loblaws was grilled by the committee for three and a half hours. It was led by veteran executive Richard G. Meech, whose roles included vice-president, secretary-treasurer, and corporate counsel. Meech used his talent for projecting sincerity to explain how supermarket execs tried to keep prices under control when dealing with factors ranging from ruined crops to labour disputes. He stressed, occasionally in a condescending manner, that the chains supported consumers and responded to their needs by offering cheaper house brands and specials on nationally recognized products.
“The chain-store supermarket,” Meech observed, “has done an awful lot for [the housewife] in establishing cleanliness in stores, establishing quick distribution of farm products, and bringing out a lower rate of prices that did not prevail when there were not such strong groups to the services which in our type of civilization is demanded.” The company denied accusations that it charged more for bologna and hamburger in lower-income areas.
Meech also highlighted the value of trading stamps and promotional games, saying they paid for themselves with higher sales volumes and excited customers: “Have you ever considered how dull it would be for a housewife to go into a store and see nothing but price tickets and a display of produce? Shopping would lose all its romance of life if it was reduced to only a display of farmers’ products.”
Headline from the October 12, 1966, and October 26, 1966, editions of the Toronto Daily Star.
Meech defended the industry’s pricing practices, citing the high degree of competition. But this didn’t satisfy the committee, whose members wondered what the effect was on prices at stores that had corporate ties to all aspects of the food industry, from distribution to packaging. When Meech was questioned about why American chains prospered with smaller profit margins, the discussion turned to what Weston actually owned. It was then revealed that the company’s Canadian profit margin was nearly a full percentage point higher than that of its American divisions. It was also confirmed that it fully controlled the Power, Pickering Farms, Super City, Busy Bee, and OK Economy chains, as well as three major wholesalers (Kelly, Douglas and Co., York Trading Ltd., and National Grocers).
That same day, a group of Toronto protestors calling itself Housewives Organization for Modern Economy announced that it would target the Loblaws store near Bloor and Yonge Streets.
Ad from the October 26, 1966, edition of the Toronto Daily Star.
HOME spokesperson Sheila Conway urged protestors to bring pencils and paper to do some comparison shopping, then “huddle in little groups and discuss the prices. It will probably seem like obstruction to the store management and other shoppers.” A Loblaws official claimed that HOME’s aim of attracting 2,000 protestors was implausible, as only 100 people could fit into the store (a HOME spokesperson later clarified that was the group’s total membership).
Depending on the source, between 25 and 65 showed up the next night. According to the Globeand Mail, “once inside, the women milled around the store while passersby, attracted by the television cameras and photographers, crowded against the windows to watch.” The protesters peeled layers of price stickers off products, revealing the degree of inflation (nutmeg, for example, had gone from 28 cents to 39 cents). To counter the protestors, the store offered free cups of coffee while a Loblaws executive explained the public’s demand for trading stamps. Press coverage depicted the evening as a misfire that fizzled out and quoted a Loblaws official who believed the night’s sales hadn’t been harmed.
Protestors in Sault Ste. Marie. (Sault Star, October 21, 1966)
One competitor tried to use the protest for publicity. Before HOME arrived, the owner of Franklin’s Portion Pak stores walked in with a female model dressed in army fatigues and armed with a bayonet. She held up a sign indicating Franklin’s offered better shopping. A store employee asked the model to leave, telling her she could parade outside for as long as she liked. The model departed.
Another Toronto group, WASP (Women Against Soaring Prices) hoped that 100 women would picket A&P, Loblaws, and Power stores in the Junction neighbourhood, as well as Dominion’s headquarters on Rogers Road (a site now partly used by a Value Village). Around 60 WASP protestors handed out leaflets urging shoppers to boycott perishable foods, stick to the cheapest brands, and write to their local MP.
In Sault Ste. Marie, 20 women marched to a Dominion store amid criticism from some community leaders. The city’s only female councillor, Vera Falldien, suggested individuals could be savvier shoppers by picking cheaper cuts of meat and doing without bonus items like kitchen or dining dishes and trading stamps; Chamber of Commerce manager Wilf Hussey felt they should picket more stores instead of singling one out and giving it a bad name. The protestors carried signs with slogans like “We won’t give up until prices come down” and, playing on Dominion’s famous slogan, “It’s mainly because of the meat that we don’t shop here.”
In Windsor, a group connected to a United Auto Workers local and supported by Essex County farmers’ unions targeted downtown locations of A&P, Dominion, and Loblaws. Roughly 70 people picketed those stores on October 27 to promote a two-week boycott. Children carried signs declaring “We want milk prices down to our size.” (A clash of personalities between leaders of the group soon led to a split.)
Article from the October 22, 1966, edition of the Toronto Daily Star.
As the hearings and boycotts continued, investment analysts expressed pleasure that the Weston veil of secrecy was cracking. As one unnamed analyst told the Toronto Star, “we should have got the housewives on our side long ago.”
It occurred to Garfield Weston and Metcalf that, rather than protecting it from the competition, secrecy was harming the empire. During a Loblaws Companies AGM in Toronto on November 1, an angry shareholder blew up at Metcalf. “Why don’t you tell Ottawa that we should have a ‘fairer’ profit margin? Consumers aren’t spending as much of the dollar on food as they used to. We should be entitled to greater profits.” The irate shareholder was convinced the press wouldn’t print his side of the story and that the company was trying to keep the cost of living down.
Cartoon by Len Norris that appeared in the December 16, 1966, edition of the Windsor Star (and originally published in the Vancouver Sun).
Metcalf responded that the hearings were ongoing. He also tried to reassure attendees by observing that, while businesses didn’t like inflation, “you can’t just console the consumer by saying wages have risen faster than food costs or that production has not kept pace with demand — or money is tight — or interest rates are too high.” He reminded the audience that, as much as he wanted lower prices, “the price of everything has gone up.”
In a letter dated December 7, Metcalf provided the most details ever released regarding the Weston holdings in North America. A large flow chart confirmed long-held rumours about some businesses (such as Sayvette discount department stores and Tamblyn drug stores) and some surprises (a 40 per cent stake in Sobeys, then an Atlantic Canada chain). In total, the Weston empire included 150 companies with $793 million in assets, as well as 70 additional corporate shells. It operated 1,850 supermarkets and had ties to another 1,500 through franchising. It operated 80 production plants and 250 warehouses. Its North American interests alone made it the fifth-largest merchandiser in the world, second in profit behind American department store giant Sears, Roebuck & Co.
Article from the December 9, 1966, edition of the Toronto Daily Star.
The committee issued its interim report on December 20. Croll felt its findings would help housewives “shop both selectively and carefully.” He believed its most valuable accomplishments would be making consumers more price conscious, educating the public, inspiring restraint on food prices, and revealing the extent of the Weston empire — which he also felt required “further investigation to reveal all the implications.”
The committee report recommended the establishment of a federal consumer-affairs ministry (which happened in 1967), the standardization of packaging for common items, a review of possible prosecution for misleading advertising, full disclosure of corporate activities to the public and shareholders, and more investigations into monopolistic practices. Nobody was blamed for price increases, and it was noted that prices had dropped since the hearings began. While some MPs and consumer advocates applied pressure to force Garfield Weston to testify, these efforts went nowhere.
Flow chart illustrating the extent of Weston operations in North America. (Financial Post, December 10, 1966)
The next few years were rough for Weston’s supermarkets. Compared to competitors like Dominion and Steinberg (which soon rebranded most of its Ontario locations as Miracle Food Mart), Loblaws and its associated stores were smaller, duller, and seeing declining sales per square foot. When Dominion launched a price war in late 1970, Loblaws’ market share fell dramatically — in Toronto alone, it declined over a three-month period from 30 per cent to 15 per cent.
By 1971, Garfield was asking his son Galen Sr. whether Loblaws should be shut down, sold off, or salvaged. After taking over the following spring, Galen Sr. set about consolidating and modernizing Loblaws, bringing in new talent such as Dave Nichol and Richard Currie. In came better merchandising and sharper graphics. The turnaround took a few years and meant plenty of financial losses, but by the early 1980s, new house-product lines like No Name and President’s Choice made Loblaws one of the most innovative grocers in North America.
William Shatner Loblaws commercial
Echoes of how Loblaws’ pricing was investigated and protested against in 1966 reverberate today, from online boycott campaigns to calls for federal intervention. Whether they will have any impact remains to be seen; back in the day, a Hamilton Spectator editorial saw the efforts of the federal committee as “a weak recommendation for a consumer affairs bureaucracy, to do the job the committee was supposed to do in the first place.”
Sources: Bread Men by Charles Davies (Toronto: Key Porter Books, 1987); the October 18, 1966, edition of the Brantford Expositor; the May 7, 1966, edition of the Economist; the December 10, 1966, edition of the Financial Post; the February 11, 1967, edition of the Hamilton Spectator; the November 2, 1966, edition of the Kitchener-Waterloo Record; the October 20, 1966, October 21, 1966, October 22, 1966, and December 9, 1966, editions of the Globe and Mail; the October 21, 1966, edition of the Kingston Whig-Standard; the July 2, 1966, edition of Maclean’s; the October 6, 1966, October 12, 1966, and December 21, 1966, editions of the Ottawa Citizen; the October 21, 1966, edition of the Sault Star; the January 31, 1966, October 21, 1966, October 22, 1966, November 1, 1966, and December 21, 1966, editions of the Toronto Star; and the October 26, 1966, October 29, 1966, November 2, 1966, and December 8, 1966, editions of the Windsor Star.
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