Why the rise of Loblaw’s house brands is not okay
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Hello, readers! Welcome back to Business Cycle – a look at what The Globe and Mail’s business columnists are talking about this week. In the latest edition, we’re talking about bringing the magic of Japanese 7-Elevens to Canada, the rise of Loblaw house brands and Ottawa’s recently-announced tariffs on Chinese-made electric vehicles.
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Have you seen the magic of 7-Elevens in Asia? We can have that in Canada, too
By Stephen Nagy
Last week, The Globe and Mail reported that Alimentation Couche-Tard is seeking to acquire Seven & i Holdings Co. Ltd. – the Japanese parent of 7-Eleven – in a proposal that would position the Canadian company to dominate the global convenience-store industry.
Stephen Nagy , a professor at Japan’s International Christian University, writes that the standards customers have of 7-Elevens in Asia are sky high: fresh, high-quality food and reasonable prices – and this bid is an opportunity to reshape North America's convenience-store landscape for the better.
"Alimentation Couche-Tard Inc.’s bid to acquire Japan’s Seven & i Holdings (hereafter 7-Eleven), which operates more than 85,000 stores worldwide, should be seen as an opportunity to inculcate badly needed quality into the North American convenience-store ecosystem and a new perspective on what a convenience store can and should be in a community. The sad reality is that Canadian convenience stores just don’t compare in terms of quality, price and services offered, let alone customer service."
What do you think a Couche-Tard-7-Eleven deal would mean for Canadians? Check out the full opinion piece here.
Why the rise of house brands such as Loblaw’s No Name is not okay
By Vasiliki (Vass) B.
Loblaw Companies Limited is piloting ultra-discount grocery stores in Ontario that will focus on its No Name and President’s Choice house brands. The idea of house brands is a business tactic that many companies have adopted – think Costco’s infamous Kirkland Signature or Amazon Essentials clothing – but it gives retailers an unfair advantage, writes contributing columnist Vasiliki (Vass) B.
She argues that, if unchecked, the rise of house brands will result in higher prices and worse products over time. It also primarily harms independent suppliers that can’t compete fairly and hinders innovation.
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"These private labels primarily harm independent suppliers that can’t compete fairly because retailers self-preference their own products, copy successful ones and sometimes use prices to discipline legitimate competitors. Many consumers don’t even realize that all the private-label brands are owned by the same parent company. The impact of this will play out in a diminishing selection of products, as independent companies find it harder to compete with store brands."
What do you think of the rise of house brands - a good or bad idea? Check out the full opinion piece here.
Global warming isn’t as important to Ottawa as cheap Chinese cars
By John Ibbitson
Earlier this week, Ottawa announced a 100-per-cent tariff on Chinese electric vehicles which will come into effect in early October. It matches a similar tariff imposed in May by the United States, and follows the European Union’s decision to also raise tariffs.
Columnist John Ibbitson argues that the decision stops China’s aggressive autocracy from dominating the North American EV market with its unfair trade approach, but it will do little to make EVs more affordable in Canada.
"If the very highest priority is to lower carbon emissions, then Chinese environmental and labour standards could be negotiated as part of an EV-import agreement. The real truth is that fighting global warming isn’t as important for the federal government as staying onside with the Americans. That alone is reason enough. But the next time a politician tells you that we must do everything in our power to combat global warming, ask them why they won’t let you buy a cheap Chinese EV."
What do you think of Canada’s tariffs on Chinese EVs? Check out the full opinion piece here.
More business headlines we’re following this week:
The Globe's business opinion pieces are commissioned and edited by Ethan Lou. If you would like to write in this section, please send pitches to elou@globeandmail.com.
Thank you for reading our latest edition! We'll be back next Thursday with another Business Cycle roundup.
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