Blue Chip Blunders: Profits vs. the People

By Dylan Howse

Company blunders are starting to become an increasing occurrence in this day in age; most recently we saw Whole Foods not allowing Canadian employees to wear poppies on Remembrance Day. Yet, some larger companies are taking advantage of the current state of play to increase their bottom line at the expense of their people.

Throughout this pandemic, we’ve seen what we thought were strong socially conscious blue-chip companies put profit over their employees and customers. Amazon, Loblaws, and Hudson’s Bay are among the worst of them.

In September, an American consumer advocacy group accused Amazon of price gouging on items such as soap, face masks, and toilet paper in the early days of the COVID-19 pandemic. Claiming that they hiked up prices on many essential items in March and April, marking up items to as much as 1,000 percent.

“Amazon has fundamentally misled the public, law enforcement, and policymakers about price increases during the pandemic,” said Alex Harman, the consumer policy advocate for the group.

CBC News reported previously that Amazon’s Canadian website was selling a small, 60-milliliter bottle of hand sanitizer for $184. Amazon shedded the blame on third-party sellers.

Additionally, this month Loblaws announced that it was going to increase its dividend payout by roughly 6.5% per share amid increasing sales and revenue from the pandemic, totaling $15.67 billion, up nearly 7% or $1 billion in the same quarter last year.

Yet despite the increase in sales and workload, they have continuously refused to reinstate “hero pay”, a $2-an-hour pay raise it gave workers early on in the pandemic before rolling it back in June.

Loblaws replied to the backlash with, “The temporary pay premium, introduced at the height of the panic buying and uncertainty, was never about safety. It was a recognition of extraordinary effort. Our stores are now operating at a normal pace, albeit in a new way.”

A billion-dollar increase in revenue yet you’re operating at a so-called ‘normal pace’? And despite this, decided to give a 2-cent increase on 353 million outstanding shares equating roughly to an additional $7 million dividend outlay to shareholders instead of helping your frontline workers?

Moreover, this past week Hudson’s Bay landed itself into trouble for keeping its Toronto flagship location on Queen Street open on Monday, despite provincial orders for non-essential retailers to close their stores in the city and nearby Peel Region.

Hudson’s Bay argued the flagship could remain open because it sells essential items like food and appliances, and has a Pusateri’s grocery store in the basement. Crumbling under the backlash, it decided to close the store starting Tuesday.

“[HBC was] trying to catch up with public sentiment and trying to put the toothpaste back in the tube,” said Bob Pickard, principal of Signal Leadership Communication, “I think it’s too late for them to restore public goodwill on this. It looks like they were trying to pull a fast one.”

On top of this Hudson’s Bay owes millions in rent across multiple locations across Canada, claiming that it should receive special treatment with regards to payment because of the pandemic. Courts this week have ruled against Hudson’s Bay forcing them to pay up, calling on their “New York-based private-equity owners” to honour its obligations and pay rent across Canada.

It’s stunning to see how such reliable and well-known companies before COVID are now in the hot seat due to their actions throughout the pandemic. How once put in a financial pickle, multibillion-dollar corporations will stop at nothing to maintain their power rankings on Bay Street.

Photo by Frank Busch, Unsplash

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