Good afternoon, honourable members. I am Sarah Davis, the president of Loblaw Companies Limited. Thank you for the opportunity to share my opening remarks and to answer your questions.
I am here first and foremost to confirm that Loblaw made the decision to start and end our temporary pay premium independently and did not coordinate with any other company. I am also keen to address the inaccurate interpretations about the purpose of the Loblaw pay premium.
In March, as pandemic complications set in, we implemented our temporary two-dollars-per-hour increase for front-line colleagues for one simple purpose: We wanted to acknowledge the extraordinary volatility and uncertainty in our stores and supply chain, and the hard work they created. The premium pay was never about safety. If our stores were not safe, we would never ask our colleagues to come to work, period. We dramatically adjusted our operations to ensure that they remained safe. We closed departments such as seafood, deli, bakery and meat, and in some cases we closed stores.
As an essential service, our job was to make sure that we got food and drugs to Canadians. We could not do that without our colleagues. Our first priority was to keep them safe and in turn keep our customers safe. Paying our people two dollars more an hour did not make them safer. The tens of millions of dollars we have invested in protections and new protocols did. We made these investments voluntarily and proudly. They were the right thing to do and they worked. In fact, the infection rate in our colleague population is considerably lower than the rate in the general Canadian population. Our nearly 200,000 colleagues have families and concerns of their own, and I cannot emphasize enough how proud we are of their hard work in serving Canadians in difficult circumstances. That was the reason for the increase.
I believe it is worth spending a few minutes to talk about how COVID-19 impacted our business and how incredibly our team has responded.
It was five months ago that we first sat down to set up a pandemic business plan. We looked at global experiences and anticipated different scenarios should the coronavirus reach Canadian soil. Looking back, it's incredible how quickly we moved from business and scenario planning to reality. Our leadership met many times daily, communicated to customers and colleagues often, and executed swiftly—a large company demonstrating agility at its best. We not only communicated well but listened well. Many of our best ideas came from discussions with our people and feedback from stores and distribution centres nationwide.
Early on, we implemented safety measures to protect customers and colleagues, such as plexiglass shields for cashiers, new sanitization protocols, customer limits in stores, social distancing ambassadors, access to PPE and more. We were similarly quick to introduce dedicated seniors' hours, make online shopping free and rapidly ramp up staffing to meet new demands. I'm not sure whether people know this, but Loblaw hired more than 20,000 people to keep customers well served and safe during the early months of the pandemic.
It seems like old news now, but in March and early April unimaginable volumes of people passed through our stores. We moved from rushes on masks and hand sanitizer to panic buying of toilet paper and flour, all while introducing and tweaking operational changes based on feedback and ideas from the front line. Our store distribution centre teams worked long days to keep us in the best shape possible, as worried Canadians prepared for the uncertainty and governments deemed us an essential service. Throughout, we have been energized by stories of strong leadership at every level: stores supporting neighbours, colleagues donating to seniors, pharmacists working tirelessly for patients, our technicians building digital retail services for vulnerable people and more.
I'm not sure I can express how proud I am to lead this incredible team of people in a business that I love. Over the past many months, our people on the front lines have reached out routinely to me to pass along their perspectives and their stories. I thought I'd share a couple.
In an open letter to colleagues, one talked about understanding the difference between hazard pay and a company, saying, “Thank You to the front line workers who got up each day and served the community during a crisis.” She said, “Loblaw stood up to the plate to make sure not only the staff but also the customer was safe.” Reading some negative comments about the removal of the premium, she said, “all I could do was shake my head”. Another letter read, “The craziness started March 11. Absolute insanity on March 12. I have never seen anything like this in almost 30 years. It was tough and ever changing. But we had jobs and support. For that I’m more than thankful.”
I am similarly proud of our industry, which has truly stepped up. I know Canadians have a new appreciation for the industry we work in, which brings us to recognition.
As I mentioned, on March 21 we introduced our temporary pay premium to recognize the extraordinary efforts of our people at the height of the pandemic. It was two dollars per hour, an average bump of 15%, retroactive to March 8, when panic shopping first began. After three extensions, we spoke to our largest union on June 8, and on June 11 announced internally and publicly that the premium wouldn't be extended beyond the final date of June 13 and would conclude with a thank-you bonus in July. These details, dates and decisions were ours alone.
After we made our decision and communicated it to our colleagues, I did send a courtesy email to Walmart, Save-On-Foods, Metro and Sobeys notifying them of our decision, recognizing that after telling 200,000 employees, the news would be public immediately.
We know the pandemic continues. We also know it's in a new phase, as determined by governments and public health experts. While our stores aren't operating in the way they did pre-COVID, they have stabilized into a new normal routine, very different from the levels of activity we saw in the early stages of the pandemic.
With the nation reopened, most other businesses are now open. Employees are back to work in shops, cafés, salons and other services, carefully and at their normal wages, so our approach is consistent with the rest of our industry and the rest of the country. Still, it's been suggested that our industry, perhaps our industry alone, should continue with premium pay. This is at least in part because people think we have outsized profits from COVID-19, and this is a false assumption. On our April's earnings call we announced higher profits from COVID following an unprecedented two-week customer buying binge, but we also said we would be investing $90 million per month for incremental pandemic costs and that these costs would offset any benefits from higher sales and would last much longer. Quite simply, we have not been putting profit ahead of our people.
Finally, I want to wrap up by addressing some of the themes raised in Monday's committee session specific to retail work. Loblaw represents a network of stores, about 2,500 in total. Some are operated corporately, but most are independent, run by individual business owners. Combined, we are the largest private employer in Canada, with nearly 200,000 employees.
Since becoming president of Loblaw, my top priority has been making sure people love working in our business. Our team includes tens of thousands of Canadians in full-time roles supporting families and making retail their career. It also includes the tens of thousands of people in part-time roles, who value flexibility and work with us for supplementary income or while putting themselves through school. A big part of my job is to make sure we meet their expectations. That includes a great place to work and opportunities to grow, and yes, it includes fair compensation.
There have been attempts to connect the pandemic pay conversation to the larger conversation about retail wages. People have asked whether retail workers make enough. This is a fair question, but the answer does not lie with any one company or within any one sector. Minimum wage is a broader question.
Defining a living wage is a national issue with huge regional nuance and implications. Like you and the union representatives you heard from on Monday, we believe government should explore these topics. As the nation's largest employer, we want to be part of those conversations, but they can't be our conversations alone. We are part of a highly competitive industry that is increasingly global, including some of the world's biggest retailers and e-commerce giants. Any solution needs to take account of the impact on all stakeholders.
As I close, let me reiterate three points. First, I am extremely proud of the decisions and actions we have taken in this pandemic. We have made them independently and without coordination. Second, we are not profiting from COVID-19. Third, we will continue to support our colleagues with investments in safety measures and with our commitment to good jobs and progressive pay over the long term.
I look forward to your questions. Thank you for your time.
