Let’s get one thing out of the way. Having CEOs of major grocery chains showing up in Ottawa on March 8 to testify before the Standing Parliamentary Committee…
But most Canadians, or politicians, don’t bother looking at balance sheets or at any data for that matter. Food inflation has been incredibly politicized, and skepticism has only grown as a result, especially in the last 12 months or so.Still, the Canadian public has every right to be cynical about the grocery business. The bread price-fixing scheme became the symbol of corporate arrogance in the sector.
Some questions in relation to the “blackout” period are also warranted. From November to February, grocers have historically not accepted price increases from vendors. Some have argued vendors will routinely boost prices before and after the blackout period, which to some degree could open the field up to some price-fixing in the industry. Hard to see how consumers can win with these industry-wide practices going on.
Kroger’s and Albertson’s are barely at 2%. How to make our food retail industry more competitive should be top of mind for members of the committee. Grocers are experiencing a so-called “detente” period. It’s been cozy for them, let’s be honest. The harsh reality in Canada is this: for years, Canadians have had an apprehensive relationship with the concept of competition. We loathe monopolies and oligopolies, even if many of them are policy-induced. We want more control, that is, until retail prices become an issue.
Both Lidl and Aldi, major discount grocers, have flirted with the idea of investing in Canada for years, but the economics of food distribution barely make sense for an expansion northwards, at least for now.
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