The scapegoating of Galen Weston
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Six months after Galen Weston Jr. stepped down as head of Loblaw, he remains the bete noire of Canada’s preening soft socialists.
In 2006, Galen Weston Jr., son of the late business tycoon Galen Weston, took a leadership role in Loblaw Companies Ltd., the crown jewel of the family’s business empire. At the time, Loblaw was in dire straits, but over the next decade and a half, Weston cemented its place as the country’s largest supermarket and pharmacy chain.
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Weston spearheaded Loblaw’s 2013 acquisition of Shoppers Drug Mart, in a merger that proved to be wildly successful. He led the industry in digital innovation, creating one of the country’s most successful customer loyalty programs, which leveraged the company’s wealth of data to keep customers coming back.
Under Weston’s leadership, Loblaw’s financial services arm, PC Financial, ended its joint venture with CIBC and began competing against the big banks directly, offering personal banking and credit card services.
The Loblaw empire now includes numerous supermarket chains, pharmacies, financial services, virtual health care and a clothing retailer. Its parent company, George Weston Limited, is one of only 14 Canadian companies that made last year’s Fortune Global 500 list.
And since Weston stepped back from Loblaw’s day-to-day operations in November, the company has continued to grow, announcing plans in February to invest $2 billion to open 40 new stores and expand or relocate another 10, creating an estimated 7,500 jobs.
In an era of sagging investment, chronically depressed productivity and flat-lined living standards, Loblaw is a rare example of a Canadian success story that should be celebrated. But Weston’s success, and his public persona as the company’s spokesperson, has made him the poster boy for the high cost of living.
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It’s an odd situation. Americans who are upset with rising inflation tend to blame President Joe, not Trader Joe. But here in Canada, it’s Weston who has become the object of scorn and derision, rather than Prime Minister Justin Trudeau — a man who touts his inflationary policies as a feature, rather than a bug.
The scapegoating of Galen Weston was made possible by a concerted campaign on the part of left-wing politicians and activists to harness public anger over rising inflation and economic uncertainty during the pandemic.
NDP Leader Jagmeet Singh has spent years trying to pin the blame for inflation on captains of industry like Weston, who he accuses of “ripping people off.” And Prime Minister Justin Trudeau has channelled Singh’s anti-capitalist campaign to divert attention from his own policy failures.
Our political leaders have been spurred on by the liberal press, and fuelled by youngsters on social media, who revel at any opportunity they get to flip the bird at Weston and other supermarket CEOs. Quite literally, in fact.
Last month, blogTO — a Toronto-based news website that that often panders to woke automatons — ran a story about a Facebook user who photographs himself giving the middle finger to a sign marking the “Galen Weston Wing” every time he visits the Royal Ontario Museum.
The article went on to discuss the “soaring profits” at Weston’s “Toronto-based investment arm, Wittington Investments,” though it links to a Times of London story about the family’s similarly named British-based firm. No need to let facts get in the way of a good narrative, we suppose.
In another particularly comical example of economic naivete, blogTO ran a story and accompanying social media video earlier this month, with breaking news that — brace yourselves — food tends to cost more at small urban pharmacies than large suburban big box stores.
“Customers are shocked by the price difference on the same items at various different Loblaw stores in Canada,” laments the host of the video. He goes on to quote the difference in the price of potato chips at Shoppers Drug Mart and Real Canadian Superstore and suggests this is an example of “price gouging,” apparently unaware that economies of scale affect how companies set prices at different locations.
A lot of the backlash against Loblaw and other grocers stems from their rising profits in recent years, which certainly doesn’t look good at a time when many Canadians are struggling to put food on the table. But a lot of this can be attributed to increased sales of cosmetics and other high-margin items as the chains diversified their portfolios, along with increased wholesale prices.
As last year’s Competition Bureau report looking at Canada’s grocery market noted, if the wholesale cost of an item increases from $1 to $1.10 and a store maintains a 20 per cent profit margin, its profit on that item would increase from 20 cents to 22 cents, leading to higher overall profits, without any “price gouging.”
And the wholesale cost of food has been steadily rising in recent years, not only due to global inflation resulting from the pandemic and the war in Ukraine, but because of Canadian government policies like the carbon tax, which makes everything from farming to shipping more expensive.
If Trudeau and Singh really wanted to lower grocers’ profits, they could remove the carbon tax and end Canada’s supply management monopoly, which would lower the cost of food. But it’s far easier to demonize the handful of Canadians, like Weston, who have managed to build successful businesses. Is it really any wonder this country is having such problems attracting entrepreneurs and investors?
National Post
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