The Canadian Competition Bureau has launched a study on the supermarket sector and its competitive dynamics. Currently, most Canadians buy groceries from Loblaws, Sobey, or Metro. Costco and Walmart are also in the market, alongside several independent retailers.
As of July 2022, there were 7,979 supermarkets and grocery stores across Canada. Loblaws has over 2,400 corporate, franchised and associate-owned locations. Sobeys owns about 1,500 stores under numerous banners and 350 retail fuel locations. Metro has 950 food stores and 650 drugstores.
"With inflation on the rise, Canadian consumers have seen their purchasing power decline. This is especially true when buying groceries," said Competition Bureau Canada.
Grocery prices in the nation have been increasing at the highest rate in 40 years and grew 11.4 percent in September. The study is already underway, and the final report is set to be published in June 2023.
The three broad questions of the study are:
- To what extent are higher grocery prices resulting from changing competitive dynamics in the sector? If they are, what factors may have contributed to the change in dynamics? What role did the pandemic and supply chain disruptions play?
- What can be learnt from other countries' steps to increase competition in the sector?
- How can governments lower barriers to entry and expansion to stimulate competition? For example, how do restrictive covenants and access to wholesale supply of groceries affect grocers' ability to compete in Canada?
New Zealand's 2020 Study and Mexico's 2018 study are the most recent reports Canada will be referencing. The United States of America also have an ongoing study.
