Canada needs more competition in grocery store industry, federal watchdog finds

With soaring grocery prices showing up in aisles for basic items, Canadians are definitely feeling the pinch.

So much so that some people have resorted to stealing overpriced food from stores with zero remorse.

After a months-long probe into the state of competition in the grocery industry, Canada’s Competition Bureau has provided recommendations that may ease the pressure on shoppers’ pockets.

The federal watchdog published its findings on Tuesday, urging the government to increase competition in the sector.

“Canada’s grocery industry is concentrated,” reads the report. “Most Canadians buy groceries in stores owned by a handful of grocery giants.”

According to the agency, the country’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.

It says this makes it tough for new players and independent shops to break into Canada’s grocery industry. On top of that, economic factors like supply chain disruptions and Russia’s invasion of Ukraine have increased 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,” reads the report. “Canada needs solutions to help bring grocery prices in check. More competition is a key part of the answer.”

The Competition Bureau gave four recommendations to governments that’ll help improve competition in the 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
4. Limit the use of property controls that make it difficult for new grocery stores to open

The agency conversed with domestic and international grocery retailers of all sizes, industry experts, international competition authorities and Canadian consumers for the study.

This report comes as supermarket giants like Loblaws face heat from shoppers for soaring food prices.

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