Save-On-Foods president Darrell Jones says the company’s plan to offer a $25 gift card to customers who might have been impacted by a 14-year bread price-fixing scheme will be “very expensive,” but is crucial to maintaining customer trust.
Repeating its prior assertion that it had no knowledge or involvement with the price-fixing scheme involving Loblaw Companies and George Weston Limited, Save-On-Foods yesterday provided further details on the $25 gift card it is offering to its members of its More Rewards loyalty program.
“We wanted to make sure that our best customers are properly taken care of, because they could have been impacted,” says Jones, who personally spearheaded the initiative with the “complete and total support” of the company’s ownership, the Jim Pattison Group. “We wanted to make sure we did what was right for our customers.”
Loblaw and George Weston (which owns bread maker Weston Foods) voluntarily disclosed to the Competition Bureau late last year that they had been part of what they said was an industry wide bread price-fixing scheme that lasted from late 2001 to March 2015.
Loblaw announced in December its intention to give customers impacted by the bread price-fixing scheme a $25 gift card, only to come under fire from people accusing it of treating it as a marketing opportunity.
While Jones admits there is an undeniable marketing aspect to Save-On-Foods’ initiative, he stresses that wasn’t the priority. “We have 100 ways we can market to our customers but this isn’t about that,” he says. “This is about doing what’s right for our customers.”
Save-On has introduced a website, MoreRewards.ca/25, where More Rewards members can register to receive a $25 electronic rebate until April 30. Eligible customers must have held an active More Rewards card prior to Dec. 31, will need to set up an online account, and must acknowledge they purchased commercial bread from Save-On sometime in the past 14 years.
Beginning Feb. 1, eligible customers will receive an email allowing them to load the $25 directly into their More Rewards account, with the discount applied to their next transaction over $25 before taxes. Save-On is also providing customers the ability to divert the funds to their local food bank. The discount is not applicable to tobacco, alcohol, prescriptions or lottery products, and expires at the end of the year.
Jones says the More Rewards program has “several million” members, but has “no idea” how much the rebate program will ultimately cost the company, which operates 160 stores from B.C. to Manitoba.
“The price of your company’s integrity is priceless, so whatever the cost is, that’s what we’ll bear, and we’ll do our best to get it back if we can,” he says.
Jones says Save-On also plans to seek compensation from bread suppliers such as Weston Foods, whose brands include Country Harvest, Wonder and D’Italiano. “It isn’t about whether we can get it from them, it’s about what’s right for our customers,” he says. “I’m truly not trying to sound sanctimonious, but in business, the most important person you have is your customer. They have to be what you think about every minute of every day.”
Jones says he worries about the long-term impact of the bread price-fixing scandal for an industry already challenged by changing consumer habits and online giants such as Amazon.
“It not only undermines the grocery business, but it undermines business in general – where people can sometimes have the perception that we’re out to get them,” he says. “That simply isn’t the case 99% of the time, but this is a real negative and we’re trying to get as far away from it as possible.”
In a letter to Save-On customers, Jones says the company is “deeply concerned” by the price fixing scheme, and stresses it had no knowledge or involvement.