Canadians’ trust in food retailers wavers following bread price-fixing scandal

While it stands to reason that Canadians may have become slightly jaded after a wide-spread price-fixing scandal was revealed late last year, a new study from Dalhousie University’s Faculty of Management confirms it.

The report, released today, finds that consumers are less likely to trust national food retailers than they were in November 2017, before Loblaws admitted it had been involved in a bread price-fixing scheme for 14 years.

“We wanted to just get a sense from Canadian consumers whether they gave their food retailers social license, which essentially means ‘do they approve of the way they do business?’,” explains Vivian Howard, lead researcher in the interview below.

Dalhousie’s management faculty published its first Social License to Operate report in November 2017. It measured which retailers and government departments Canadians think are the most trustworthy, socially responsible, environmentally friendly, and ethical in four sectors: transportation providers, retailers in the food and clothing sectors, and government departments. The researchers plan to do a series of follow-up supplements for each sector.

To gauge the impact of the price-fixing scandal hitting headlines, researchers collected survey data again in March 2018.

Over 1,600 respondents offered their opinions on several national food retailers,including Sobeys, Loblaws, Costco, Walmart, Metro, and Giant Tiger, ranking how trustworthy, ethical, socially responsible, and environmentally responsible Canadians perceive them to be.

“We wanted to see if there had been any changes in consumer perception, given the recent media coverage of bread price-fixing,” says Howard. In December 2017, Loblaws publicly admitted to participating in a bread price-fixing scheme following an investigation by the Canadian Competition Bureau. “We found that levels of consumer trust for Loblaws have declined since our study in November.”

They found that consumer trust for Loblaws has fallen by 10% since the November study, versus the food retail sector in Canada as a whole, where consumer trust has fallen by 6.31%.

The decline in trust could have serious effects. “Social License to Operate is becoming a significant issue in the food industry,” says Sylvain Charlebois, food industry professor and dean of Dalhousie’s Faculty of Management. “Companies have to think about how they are going to deliver on their ethical and sustainability promises.”

Costco received the highest overall rating in measures of trust, sustainability and corporate social responsibility.

Read the full Dalhousie food retail report, including analysis by gender, age and region, here.

Listen to lead researcher Vivian Howard break down their findings on Canadians’ trust in food retailers in this conversation with RealAg’s Shaun Haney:

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