Feds targeting a dozen foreign grocery chains for expansion in attempt to increase competition

The federal government continues to seek a foreign grocery store operator to come to Canada in an effort to increase competition and provide more options to residents.

According to the Wall Street Journal, an access to information request revealed that the feds are reviewing a list of a dozen potential candidate companies to come to Canada and compete with the big three: Loblaw Companies Limited, Metro Inc., and Sobeys Inc.

The current list stands at 12 and is mainly based in Europe, except for one from the U.S. grocery outlet Holdings, which operates 470 discount stores. Other grocery chains charmed by the feds are in Germany, Turkey, Spain, Portugal, Norway, and the Netherlands.

Canada’s Industry Minister, François-Philippe Champagne, started the search last fall after criticizing the country’s big three grocery stores for failing to disclose the causes of food inflation.

David Soberman, a marketing professor at the Rotman School of Management, tells CityNews he approves of the list, saying many of the companies named are known as market disrupters.

“If you’re able to get a hard discounter into the Canadian marketplace, that will put some real pressure on the traditional supermarkets to offer Canadians better prices,” Soberman said.

There is no word on what financial incentives, if any, would be required to attract foreign players to Canada.

Champagne has told CityNews that the feds would not offer government cash to get deals with the new chains and instead have been changing competition laws to make our market more attractive for business.

Champagned recently travelled across Europe and met with grocery CEO’s after a G7 meeting in Capri, Italy.

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Like many other countries, Canada experienced fluctuations in grocery prices due to various factors, such as supply chain disruptions, weather events affecting agriculture, and shifts in consumer demand.

The latest federal budget did not include a windfall tax on major grocers like Loblaw Companies Limited, Metro Inc., and Sobeys Inc., despite federal warnings of consequences if they didn’t make food more affordable for customers.

The pressure has led more Canadian shoppers to seek out relief at discount grocery stores, or by buying private-label products instead of brand-name. The major grocery chains have responded by opening or converting more discount stores, in particular Loblaw, which opened more than 30 new Maxi and No Frills stores last year. 

Grocery inflation continued to slow in March, rising just 1.9 per cent compared with a year earlier. That’s down from February’s annual rate of 2.4 per cent and a far cry from the peak of grocery inflation at 11.4 per cent in late 2022 and early 2023. 

With files from Mike Eppel of 680 News Radio Toronto