Making an effort to detail its findings in “plain language,” the Competition Bureau highlighted the need to communicate clearly on the issue to promote transparency.
The bureau said most Canadians buy groceries in stores owned by giants Loblaw, Sobeys, and Metro, with rising prices signalling a need for more competition in the sector.
Here are five key takeaways from the report.
Harmonized unit pricing requirements as a potential solution
Among the four main recommendations contained in the report, the Competition Bureau called on provincial and territorial governments to consider introducing accessible and harmonized unit pricing requirements.
That would force grocers to display the price of a product based on a standard package size, alongside the total price. For instance, for two differently sized containers of apple juice, a store would have to disclose the total price, along with the price per 100 millilitres, to provide an apples-to-apples comparison.
Noting the difficulty consumers face when trying to compare prices on similar items between different stores, the bureau said the requirement would give shoppers more complete information about their options: “It serves as a quick and easy way to know if a consumer is getting the best deal _ without resorting to a calculator or mental math.”
Many grocery stores already display unit pricing, but Quebec is the only province or territory that requires it by law. The bureau said governments should consider whether the requirement is appropriate for all grocers, or just large chains due to the potential burden on smaller independents.
2:08 Food inflation: More competition needed to tame high grocery prices in Canada, report argues
Not every company played ball
During its study, the bureau said the level of co-operation it received from Canada’s grocery giants “varied significantly and was not fulsome.” In many instances, it said it was unable to obtain complete and precise financial data, despite repeated requests.
Unlike when conducting law enforcement investigations, the bureau could not compel the release of information for its study, instead relying on information that was publicly available or provided voluntarily. It said it consulted with a variety of grocers, both in Canada and internationally, many of which “were happy to speak with us, and we appreciate their candour and assistance.”
“Others were more reluctant to share information with the Bureau,” it stated. “This did limit our ability to fully answer some questions that are top of mind for Canadians ? Nevertheless, the absence of this information did not prevent us from identifying important ways in which grocery competition could be increased.”
The bureau said its inability to compel information highlights the need for formal information-gathering powers and it continues to advocate for legislative changes to improve the Competition Act in that area.
A consolidated sector and the bureau’s hands tied
The report pointed out that even if you don’t shop at a store called Loblaws, Sobeys, or Metro, you may be shopping at another store that they own or are affiliated with, as all three companies have over 1,000 stores each, including franchised locations. Along with Costco and Walmart, that means just five large grocery chains operate in Canada.
But back when the Competition Act was introduced in 1986, there were at least eight large grocery chains across Canada, each owned by a different company. Five of the large chains that were around 37 years ago were bought by their competitors, including Steinberg’s stores being sold to A&P, Metro, Provigo and IGA, Provigo’s stores to Loblaws, IGA’s stores to Sobeys and Loblaws, A&P’s stores to Metro, and Safeway’s stores to Sobeys.
The bureau said it heard from some who feel Canada’s laws don’t do enough to stop deals that are bad for competition. But it said that when a big grocer buys up a small number of stores in urban areas, it is often difficult to stop them due to the challenge of proving it will lead to significant price increases.
“Despite concerns often being raised when a big company buys a smaller competitor, the reality is that consumers typically only lose one of many alternative stores,” it said.
“The law in Canada typically will not allow the Bureau to intervene in these deals, as they are generally seen as unlikely to have a significant impact on prices and other dimensions of competition.”
The rise of online shopping
With more Canadians purchasing their groceries online, grocery giants have invested significantly into their online business models, which the bureau said has been a boon for consumer choice.
But it cautioned that online shopping may have simply created a new way to access existing options, rather than increase competition. It said online platforms can provide a new way to source products from a pre-existing retailer.
Meanwhile, delivery services often act more like grocery store partners than independent competitors, meaning they can’t charge lower prices than the store they buy from without taking a loss.
To leverage the rise in online shopping habits and meaningfully bolster competition, the bureau said Canada will need to see truly independent online grocers emerge.
“Grocery business models are adapting to the online world and, with that, comes the opportunity for new competitive alternatives to emerge,” it said.
Where are the international grocers?
The bureau also studied why few international grocers, aside from Walmart and Costco, have entered the Canadian market. It said it heard from companies not currently in Canada that there are a number of reasons why they haven’t sought to bring their business here, including the fact that Canada’s existing grocery giants would be “daunting competitors.”
Others cited high-cost factors such as Canadian grocers’ vast selection of ethnic products, which would be challenging to replicate, and laws requiring bilingual labels on packaged foods.
Some noted that while Costco and Walmart found success in Canada, other international companies such as Target did not, prompting worries of a similar experience.
To successfully enter Canada, some international grocers noted that it would be crucial to establish distribution networks, relationships with Canadian suppliers and brand recognition. For those reasons, many feel it’s easier to continue focusing on expansion in their current regions instead.
HALIFAX – Ottawa is negotiating a $500-million bailout for Nova Scotia’s privately owned electric utility, saying the money will be used to prevent a big spike in electricity rates.
Federal Natural Resources Minister Jonathan Wilkinson made the announcement today in Halifax, saying Nova Scotia Power Inc. needs the money to cover higher costs resulting from the delayed delivery of electricity from the Muskrat Falls hydroelectric plant in Labrador.
Wilkinson says that without the money, the subsidiary of Emera Inc. would have had to increase rates by 19 per cent over “the short term.”
Nova Scotia Power CEO Peter Gregg says the deal, once approved by the province’s energy regulator, will keep rate increases limited “to be around the rate of inflation,” as costs are spread over a number of years.
The utility helped pay for construction of an underwater transmission link between Newfoundland and Nova Scotia, but the Muskrat Falls project has not been consistent in delivering electricity over the past five years.
Those delays forced Nova Scotia Power to spend more on generating its own electricity.
This report by The Canadian Press was first published Sept. 16, 2024.
TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
