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.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
