Mythbusters: Were Overzealous Algorithms Responsible for Slow Sales at Loblaw Companies Ltd?

Well, this is new.

Retailers have blamed bad weather for poor sales before, but I don't think I've ever seen a retailer blame bad algorithms.

Loblaw Companies Ltd, Canada's largest grocery and pharmacy chain, which owns the mainstream brand Loblaws and discount brand No Frills, had a soft Q2 performance with same-store revenue growing 0.6%. Their President, Sarah Davis, blamed the performance on algorithms that prioritized increasing profit margins instead of promotional pricing to attract foot traffic. That is, Loblaw chose to increase the revenue from each customer instead of focusing on increasing the number of customers. She says:

We know exactly what we did and what we did was we focused on going for margin improvements...And in the excitement of seeing margin improvements in certain categories as we started to implement some of the algorithms, people were overzealous...You end up with fewer items on promotion in your flyer.