Will Canada bring in more grocery competition?

Bill Wilson

Canadian lawmakers have tried to do several things to lessen the hardship of food inflation, the latest being an attempt to bring more grocery competition into the country, reports the Wall Street Journal.

Canada Industry Minister Francois-Philippe Champagne put together a memo acquired by the Wall Street Journal outlining the 12 grocers he planned on targeting. All are based in Europe except Grocery Outlet Holding, which is based in the U.S. and told the Wall Street Journal it would not be entering the Canadian marketplace. Aldi and Lidl, both headquartered in Germany, highlight the group. Aldi is one of the fastest-growing grocery retailers in the U.S.

Others making the list were Edeka Group and Rewe Group, also out of Germany, Les Mousquetaires out of France, Jeronimo Martins based in Portugal, Spain’s Distribuidora Internacional de Alimentacion, Reitangruppen out of Norway, X5 Retail Group located in Amsterdam, and Turkey’s BIM Birlesik Magazalar.

It’s an attack on Canada’s three biggest grocery companies, Loblaw, Metro, and Empire, which have all reported record profits over the last year.

The Wall Street Journal said the latest inflation data in Canada shows that food prices have been 23% higher since just before the COVID-19 pandemic.

Furthermore, Canada’s Competition Bureau released a report last year that said Loblaw, Metro, and Empire controlled the grocery sector and that solutions needed to be generated to bring grocery prices in check. The report suggested more competition.

Another study from December 2023 initiated by the Centre for Future Work, a Progressive research institute, predicted yearly profits of more than $6 billion, an 8% year-over-year increase.

Canada considered a grocery tax on store profits. There was also a blackout period on supplier price increases, but that came to an end in February.

Grocery executives have also met with Canadian officials on more than one occasion to discuss food prices.

During a meeting in October 2023, the grocery heads from Loblaw, Sobeys, Metro, Costco, and Walmart met with Champagne and discussed more discounts, price-matching campaigns, and price freezes.