Manitoba shoppers, local grocers want change

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This article was published 28/06/2023 (849 days ago), so information in it may no longer be current.

On the heels of a national report calling for more competition in Canada’s grocery industry, and another month of high food inflation, Manitoba shoppers and local grocers are wanting change.

“The prices are horrific,” said shopper Phyllis Hirota. “I’d love to know why.”

She’d learned early Tuesday that the Competition Bureau had released a report on the country’s grocery industry.

The federal branch began its study last October. It found five corporations — Loblaws, Sobeys, Walmart, Metro and Costco — consume most of the market.

In 1986, there were at least eight large grocery chains across Canada, the bureau outlined. Some, like IGA and Safeway, merged with competitors like Sobeys.

Canada’s largest grocers’ food gross margins increased by “a modest yet meaningful amount” over the last five years, predating the COVID-19 pandemic, the Bureau said in its report.

“The fact that Canada’s largest grocers have generally been able to increase these margins — however modestly — is a sign that there is room for more competition in Canada’s grocery industry,” the report states.

It outlines four broad policies for government to stimulate competition: creating a strategy to support new types of grocery businesses, like online retailers; encouraging growth of independent grocers and attracting international grocers; harmonizing unit pricing requirements; and limiting property controls which make it difficult to open new grocery stores.

Hirota, 77, wants more accountability of Canada’s biggest grocery chains.

Kevin Schmidt, owner of Downtown Family Foods, is looking for “a more level playing field with the Walmarts and the Loblaws” who have an advantage by selling clothing and pharmaceutical goods. That might involve setting a minimum price for goods which all retailers must charge customers, Schmidt said.

“It is hard for any small person or business to get into groceries,” he stated. “If you want to become someone who’s got a good supply chain behind (you), there’s really no choice but to go with (a corporation).”

Often, suppliers sell to corporations, who then sell to smaller businesses. Schmidt buys most of his store’s wares through Sobeys’ wholesale division. Downtown Family Foods eats any markups to that point and adds its own to keep operating, Schmidt said.

Several local grocers the Free Press has spoken to do the same.

On Tuesday, Statistics Canada released its latest inflation data. Food prices increased nine per cent year over year last May.

“It’s hard to know where those price increases are coming from,” Schmidt said.

Oil and animal feed are more costly, contributing to higher prices on the manufacturing and supply side, and minimum wage has increased, he added.

Ed Cantor, owner of Cantor’s Quality Meats & Groceries, wants government to crack down on manufacturers.

Increasing the number of grocery stores across Canada will likely flood the market and hurt small businesses, Cantor said.

The Canadian Federation of Independent Grocers approximates 6,900 independent grocery stores nationally.

Stuart Smyth, chair of agri-food innovation and sustainability enhancement at the University of Saskatchewan, expressed frustration at some of the Competition Bureau’s recommendations.

“(There’s a) lack of innovative thinking about how to make a serious contribution to addressing the challenge of higher food prices,” Smyth said.

Competition in retail is largely something the private sector addresses, not government, Smyth stated. However, government regulates interprovincial trade.

“There’s just a lot of efficiencies that could be gained from the regulatory side that definitely have contributions to higher food prices,” Smyth said.

He listed trucking regulations, taxes on food products and meat inspections as areas to investigate. Federal dairy quotas cause producers to waste milk regularly, which raises the cost of milk, he said.

There’s a “significant gap” between food inflation and overall inflation, which was 3.4 per cent increase, year-over-year, in Manitoba last May. The gap can’t be solely attributed to a lack of competition between grocers, Smyth said.

The Manitoba government is considering ways to reduce red tape and increase fair trade, said Consumer Protection Minister James Teitsma.

He didn’t offer specific examples but applauded the Competition Bureau’s recommendation to standardize unit pricing, making it easier to compare prices of different sizes of products, like cereal boxes.

“If it is a federal (regulatory) thing, we’re happy to advocate for it. If it’s a provincial thing, we’re happy to go ahead and improve on it,” Teitsma said.

He emphasized removing the federal carbon tax and keeping the market open for new businesses to start grocery operations — including online businesses — as ways to increase affordability for Manitobans.

Last year, Loblaws, Sobeys and Metro together reported more than $100 billion in sales and more than $3.6 billion in profits. All three have more than 1,000 stores each.

Jill James, a New Zealander who’s spending the summer in Winnipeg, finds grocery stores more expensive in the Prairie province than in Oceania.

“I just couldn’t believe that a casual grocery shop was $170, and I didn’t even buy meat,” James said.

In its report, the Competition Bureau said companies have legitimate reasons for expansion, and it doesn’t want to discourage growth. Instead, more competition in the industry could keep prices low across the board, it said.

gabrielle.piche@winnipegfreepress.com