Competition Bureau Report Says Canada Needs More Grocery Competition as Consumers Struggle with Food Inflation 


Share post:

The Competition Bureau is making recommendations to promote competition in Canada’s grocery industry – actions that would encourage lower prices and more choice for Canadians.

The Bureau, on Tuesday, said grocery prices have increased at their fastest rate in more than 40 years, and Canadians are feeling the pinch.

Matthew Boswell

It published its market study report Canada Needs More Grocery Competition which recommends that all levels of Canadian government act to increase competition in the grocery industry.

“As we have witnessed the highest cost-of-living increases seen in a generation, Canadians are recognizing the relationship between a lack of competition and rising prices. By acting now, governments at all levels can take steps towards creating a more competitive grocery industry. Competition can help lower prices and make life more affordable for Canadians,” said Matthew Boswell, Commissioner of Competition, in a statement.

Farm Boy Weekly Specials at Sugar Wharf Location (Image: Dustin Fuhs)
Loblaw Carlton at Maple Leaf Gardens (Image: Dustin Fuhs)

The report makes four recommendations to governments to meaningfully improve competition in the grocery industry:

1. Create a whole-of-government strategy to support the emergence of new types of grocery businesses;

2. Encourage the growth of independent grocers and the entry of international grocers;

3. Introduce accessible and harmonized unit pricing requirements to empower consumer choice; and

4. Limit the use of property controls that make it difficult for new grocery stores to open.

“Canada’s grocery industry is concentrated. Most Canadians buy groceries in stores owned by a handful of grocery giants. In 2022, Canada’s three largest grocers—Loblaws, Sobeys, and Metro—collectively reported more than $100 billion in sales and earned more than $3.6 billion in profits,” said the report.

“For new players and regional independents, the Canadian grocery industry is tough to break into. Canada is a big country and opening new grocery stores is expensive and difficult. The industry’s big players operate thousands of stores and are well entrenched in the shopping habits of Canadians.

“In recent years, industry concentration has increased, and it has become more difficult than ever for businesses to enter, expand, and compete effectively. Furthermore, the price Canadians pay for groceries has been rising fast. Factors such as higher input costs, Russia’s invasion of Ukraine, and supply chain disruptions have contributed to recent increases in the price of food. But we have also seen a longer-term trend that pre-dates those events, of Canada’s largest grocers increasing the amount they make on food sales.”

Image: Sobeys

The report said Canada needs solutions to help bring grocery prices in check. More competition is a key part of the answer.

The Bureau launched its Retail Grocery Market Study on October 24, 2022. The study examined various issues with the goal of recommending measures that governments can take to help improve competition in the sector.

“With inflation on the rise, Canadian consumers have seen their purchasing power decline. This is especially true when buying groceries. In fact, grocery prices in Canada are increasing at the fastest rate seen in 40 years,” said the Bureau at the time.

“Many factors are thought to have impacted the price of food including extreme weather, higher input costs, Russia’s invasion of Ukraine, and supply chain disruptions. Are competition factors also at work? To find out, the Bureau will study this issue from now until June 2023.”

The study examined three main questions:

1. To what extent are higher grocery prices a result of changing competitive dynamics?

2. What can we learn from steps that other countries have taken to increase competition in the sector?

3. How can governments lower barriers to entry and expansion to stimulate competition for consumers?

Image: Competition Bureau Canada
Inside a Loblaw Grocery Store (Image: Dustin Fuhs)

On Tuesday, the Bureau said it also needs to approach its work in the grocery industry with heightened vigilance and scrutiny to ensure that Canadians benefit from greater choice and more affordable groceries. 

“We need to thoroughly and quickly investigate allegations of wrongdoing, and we need the power to act when issues arise. Therefore, in addition to the above recommendations for governments across Canada, the Bureau commits to taking the following three steps to better promote competition in the Canadian grocery industry:

1. Approach our work in the Canadian grocery industry with heightened vigilance and scrutiny.

2. Provide a pro-competitive perspective to support the implementation of Canada’s grocery code of conduct.

3. Revisit the findings of this study in three years to assess progress on recommendations made to government,” it said.

“Change will take time. These solutions will not bring Canadians’ grocery bills down immediately. But by acting now, governments at all levels can take steps toward creating a more competitive grocery industry in Canada.”

Mario Toneguzzi
Mario Toneguzzi
Mario Toneguzzi, based in Calgary, has more than 40 years experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald covering sports, crime, politics, health, faith, city and breaking news, and business. He is the Senior News Editor with Retail Insider in addition to working as a freelance writer and consultant in communications and media relations/training. Mario was named as a RETHINK Retail Top Retail Expert in 2024.


Please enter your comment!
Please enter your name here

More From The Author



Subscribe to the Newsletter


* indicates required

Related articles

Flexible Work Company ‘LAUFT’ Discusses Expansion Plans and New Government Collaboration [Interview]

Founder Graham Wong discusses the Canadian company's plans for new locations, enhanced spaces for events and content creation, and a future in places such as airports and hotels.

Ice Bath Spa Concept ‘Othership’ Opens 2nd Toronto Location with Expansion Plans for Major Markets in Canada and NYC [Interview]

The company's co-founder discusses the concept that began in his back yard in 2019, which is now a big business with a new Yorkville location and plans for Manhattan and other urban centres.

Anatomy of a Leader: Peter Mammas, President and CEO, Foodtastic

The man behind the food empire got started in Montreal where he wanted to be a pilot, then an architect. He eventually worked his way up in the world of foodservice, where he found his passion.

Nostalgia vs Reality: Exclusive Poll Shows Canadians Warm to Zellers’ Return but Hesitate to Shop One Year After Relaunch

Zellers relaunched a year ago as shop-in-stores at Hudson's Bay, and a poll done for Retail Insider shows that Canadians' think the current offerings fall short.

Cracking the Newcomer Code: Study Urges Canadian Retailers to Adapt for Inclusivity as Immigrants Reshape Retail Trends [Feature]

Making newcomers feel at home could mean increased sales for retailers. Ian Large of Leger says retailers should collaborate with communities as Canada's population changes.

Italian-Themed QSR Chain Fazoli’s Announces Major Expansion into Canada with 25 Locations Planned [Interview]

The chain could open even more locations according to its development officer, who discusses Fazoli's success being rooted in quality ingredients and speedy service.

Toronto-Based Fashion Designer Adam X Discusses Inspiration, Retail and Designing for the Future [Video Interview]

Craig and Adam X discuss the the founding and ethos of Adam X Atelier, a Toronto-based haute couture fashion brand which is rare to find in Canada.

Swatch Opens Flagship Store in Downtown Vancouver as it Expands Across Canada [Photos]

It's the 12th store in Canada for the popular Swiss watch brand, which almost doubled its store count in this country in less than a year.

Economic Strains Dampen Montréal’s Retail Growth, But Luxury and Transit Projects Could Spark Revival: JLL Report

Montreal retail has struggled recently and leasing activity has been particularly slow downtown, while a new luxury mall and a growing transit network could help things this year.

IKEA Canada Launches ‘Second-Hand Tax’ Initiative in Protest of Government Policies [Interview]

Ikea dropped the tax on its 'as-is' marketplace, stating that second-hand goods should not be subject to the same taxes as new products.

Significant Variances in Food Price Changes Not Reflected in Statistics Canada Numbers [Op-Ed]

Sylvain Charlebois says that StatCan numbers on food inflation do not reflect the reality of what consumers are seeing at the grocery store.

US-Based Women’s Fashion Brand Windsor Announces First 5 Canadian Stores, Plans National Expansion [Interviews]

The fashion brand is expected to be a runaway success in Canada, with an existing customer base and a void in the market.