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CSR and the Closure of a Neighbourhood Supermarket

Table of Content
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Abstract.....................................................................................................................................3

Introduction..............................................................................................................................4

Discussion..................................................................................................................................5

Stakeholders and their influence........................................................................................5

Loblaw’s Socially responsible steps to prevent competition............................................5
Action plan from City Council............................................................................................6
Loblaw’s social responsibility and its moral obligation...................................................6
Conclusion.................................................................................................................................7

References.................................................................................................................................8
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Abstract

Loblaw closed its SaveEasy supermarket in the Churchill shopping center in 2012. This

supermarket was the only food store in the community, and the next closest food store was

2kms way. Many of the residents do not own their own transport, because of which the

closure of neighborhoods supermarket inconvenienced them. They raised their concern with

Loblaw first, and their efforts were futile. Then they approached the city council with a

signed petition to not approve any other stores except for food stores in the location.

However, this effort was also futile. Later on, Loblaw wouldn’t allow another grocery store

to either rent or acquire the facility. This step created great agony among the locals and also

the local media. In this paper, I discussed various stakeholders and their influences associated

with Loblaw, socially responsible steps taken by the Loblaw to avoid the competition, action

plan from the city council, and Loblaw’s social responsibility and moral obligations.

Keywords: Stakeholders, universal rules of ethics, monopoly, ethical egoism, corporate social

responsibility (CSR), ethical relativism

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Introduction

SaveEasy supermarket in Churchill Square Center St.John’s, NL was the property of

Loblaw Inc. The residential area of Churchill park was developed after World war II which

had a small mixed retails square. This square is situated at the end of Memorial University

Newfoundland campus. It had many stores like restaurants, medical, clothing, etc. The

residents were primarily students, faculty, staff, and retired people.

Loblaw closed its SaveEasy supermarket on January 14, 2012, due to low profitability and

exorbitant renovation cost as the building was old. This closure created unrest among

residents who were dependent on the only food store in the community. Many of these

residents didn’t own their own transport to travel to the next food store, which is 2kms away.

The local council and media are also worried about this closure. Further to avoid competition,

Loblaw was not allowing any other grocery stores to occupy the vacant space in the building.
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Discussion

Stakeholders and their influence

Stakeholders are people or corporations directly or indirectly involved with an

organization. These stakeholders impact the decisions made by the company they are

involved with (Kenneth, 1991). The impact of these stakeholders varies based on their level

of involvement.. There are various ways to categorize stakeholders. In this paper, I will

discuss external or internal categories. In this case study, the stakeholders and their influences

are listed in below table 1.

Table 1

Stakeholder Table

Type
(Extern
S.n Stakeholde Interest Power
al or Influencing factors
o r Level Level
Internal
)
Loblaw .Low Company profitability.
1 Inc High High .Expensive repairs to the building.
(Owner) .Change in strategy to big-box trend.
Employees Internal
of
2 SaveEasy High Low Job termination
Supermark
et
Users
(Students, Inconvenience in buying food as
3 High Low
retires, another food store is 2kms away.
etc.)
City
Externa .Concerned about the resident’s
council
4 l High Medium inconvenience.
(Deputy
.City revenue
Mayor)
Competiti .High competition
5 on (Other High Low .Opportunity to expand or acquire
stores) new store.

Loblaw’s Socially responsible steps to prevent competition

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Some companies define their own principles to determine their decision's ethical outcomes,

referred to as Ethical egoism (self-interest ethics) (Medlin, 1957). Loblaw’s decision to not

let other grocery stores rent or acquire the facility displays their self-interest. In this case, the

company wants to eliminate company should consider any competition. As per Loblaw, their

decision is ethical, but the company only is worried about themselves as per the citizens.

However, a the interests of its stakeholders before making any decision to maximize the

profit.

Action plan from City Council

The residents are usually afraid of any changes in their surroundings and businesses; it

creates uncertainty, and unemployment is another factor that makes agony (Yakovlev &

Avraamova, 2008). The city council should take the following actions:

 Universal rules of ethics state that rules and morals should be standard for all

(Schwartz, 2005). The city council should define a policy for all business owners to

let out any unoccupied stores for different stores.

 Discuss with Loblaw to understand their strategy and offer financial assistance for

repairs and maintenance of existing store if this factor is the barrier.

 Immediately set up for other grocery stores to avoid monopoly.

 Increase public transport for the convenience of the residents and businesses.

Loblaw’s social responsibility and its moral obligation

Ethical relativism states that an activity is correct or wrong relies upon the ethical

standards of the general public wherein it is practiced (Lyons, 1976).In the viewpoint of

Loblaw, they are closing the SuperEasy supermarket due to low profitability, high repair cost

for degenerating building, and change in strategy to install full-service stores. Loblaw was of

the Top 50 socially responsible company in 2015, according to Mac/eon’s magazine.

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Corporate social responsibility(CSR) is an important factor in the business world, and all

companies have a responsibility towards the community (Shaw, 2012). In this case, since

there is no other food store in the locality Loblaw is morally obligated to either keep the

existing store open or allow other grocery stores to open.

Conclusion

Loblaw’s closure of its SuperEasy supermarket created inconvenience among local residents.

Many external and internal stakeholders were directly or indirectly affected by this closure.

Most residents, like students and senior citizens, depended on this store as they don’t own

any vehicle and the next nearest food store is 2kms away. These citizens were socially

responsible and raised their concerns to both Loblaw and the city council, but their efforts

were futile. The company exhibits ethical egoism with its decision. The City council should

bring in universal rules of ethics common for all businesses. The city council should act as a

interface between its public and Loblaw to resolve the situation. It should also arrange for

alternative food stores immediately and provide affordable transport. The whole situation has

created an ethical dilemma for its citizens, and Loblaw Inc. Loblaw should honor its social

responsibility and moral obligations to keep either keep the food store open or let out other

food stores without thinking about the competition.

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References

Kenneth E. Goodpaster. (1991). Business Ethics and Stakeholder Analysis. Business Ethics

Quarterly, 1(1), 53–73.

https://doi-org.ezproxy.myucwest.ca/10.2307/3857592

Lyons, D. (1976). Ethical relativism and the problem of incoherence. Ethics, 86(2), 107-121

https://doi.org/10.1086/291985

Medlin, B. (1957). Ultimate principles and ethical egoism. Australasian Journal of

Philosophy,  35(2), 111–118.

https://doi.org/10.1080/00048405785200121

Schwartz, M.S. (2005). Universal Moral Values for Corporate Codes of Ethics. J Bus

Ethics  59, 27–44.

https://doi.org/10.1007/s10551-005-3403-2

Shaw, H. J. (2012). CSR, SMEs and food retailing: The advantages of being a lesser

god. Journal of Business & Retail Management Research, 6(2), 15-25.

https://www.jbrmr.com/cdn/article_file/i-13_c-96.pdf