Loblaws losing consumer trust after bread price fixing story, Dalhousie study finds

Consumer trust in their grocery stores has fallen since allegations emerged that many of the chains were in cahoots to keep bread prices high, a new study out of Dalhousie University in Halifax has found.

This month, researchers from Dalhousie University's Faculty of Management surveyed 1,641 Canadians across the country for their views on major retail grocery chains, asking people to rate them on a five-point scale on various factors related to their trustworthiness. The numbers were then tabulated and compared with a similar survey from last November.

Overall, the researchers found that trustworthiness for the sector as a whole declined by 6.31 per cent over the five-month interval. But that figure belies a lot of variance among individual chains. Loblaws reputation has slid by 10 per cent, the survey found, while rival Sobey's has seen its score increase by 1.6 per cent over the same period.

Loblaws is the brand most connected with the bread price-fixing story, since it was an insider there who initially blew the whistle on the practice, whereby the Competition Bureau alleges that numerous bakers and grocers conspired for years to keep prices elevated for packaged bread products. Loblaws said it was involved in the scheme for the previous 14 years. 

Many grocery chains are allegedly involved, and the industry has been tarred by a wide brush. Sobey's for example, has angrily denied that it was involved, as has Montreal-based Metro.

Sobey's higher trustworthiness score could be a sign that its claim is holding weight with consumers.

"We wanted to see if there had been any changes in consumer perception, given the recent media coverage of bread price-fixing," lead researcher Vivian Howard said. "We found that levels of consumer trust for Loblaws have declined since our study in November."

The Dalhousie study was open-ended in that respondents were allowed to offer their score on any grocery chain they wanted. But the final report only included scores if there were enough repeated instances of the chain coming up.

The cutoff was being named by at least 85 different consumers, and by that metric, here are the six grocery chains that study ranked, in order of their trustworthiness:

1. Costco
2. Sobey's
3. Giant Tiger
4. Metro
5. Loblaws
6. Walmart

Only Sobey's and Loblaws were included in the inaugural survey, so as such it's not clear whether the trustworthiness score of the other four has increased or decreased over the past five months.