NORTHERN LIGHTS - Three is Not Always a Charm
Written by SP Editor
Canada’s big three are not automakers, but the grocery giants Empire, Metro, and Loblaws. These three companies effectively control Canada's food supply. Empire owns Safeway, a major player in Western Canada, and Sobeys, which is a bigger player in Central and Atlantic Canada. Loblaws owns Real Canadian Superstore and the parent chain Loblaws. Metro is a major player in English Canada, but dominates the market in Quebec. Together, the big three grocers own 75% of the grocery stores in the country.
If controlling that much of the market was the whole story, that would be bad enough. But it is only the start. Canada’s underregulated food market enables them to control far more than just retail grocery sales.
They also control food production and distribution. Small food producers in Canada often cannot get their products to market because the big three impose mandatory slotting fees, requiring suppliers to pay for shelf space in their stores. Small producers frequently cannot afford these fees and are effectively shut out. One way they gain access is by selling directly to the grocery chains, which then market the products under their own private labels. Empire has Compliments, Loblaws has No Name and President’s Choice, and Metro has Selection. The big three control much of the food trade in Canada and are the ones setting the prices—they buy low and sell high. They win and we all lose.
The big three also control the distribution of food. Loblaws operates Canada’s largest private trucking fleet, moving food from its 22 distribution centers to its 2,450 stores. Like Amazon, it has increasingly turned to automation to reduce lab our costs. Loblaws’ new mega-distribution center in Caledon, Ontario, just outside Toronto, is a staggering 1.2 million square feet and highly automated.
Loblaws, Empire, and Metro own much of the real estate as well. Through massive corporate spin-offs and dedicated Real Estate Investment Trusts (REITs)—such as Loblaws’ Choice Properties, the largest REIT in Canada—they own the land and buildings where Canadians buy their food, as well as large portions of the big-box stores and strip malls surrounding them. This ownership enables them to prevent potential competitors from selling food nearby.
This is done through restrictive property deeds and covenant controls that choke out competition. When they sign leases or sell land, they insert strict clauses that legally prohibit independent grocers, discount stores, or specialty food shops from selling food anywhere near them. By owning the land, they lock up the best retail locations in Canadian communities, ensuring that small food businesses have nowhere to set up shop while forcing consumers into a market with few alternatives.
All of this adds up to Canada having one of the most concentrated grocery markets in the developed world—far more concentrated than those in the United States or the United Kingdom. This concentration stems from Canada’s weak regulation of the food sector and the lack of strong anti-monopoly laws to protect consumers from corporate oligarchs.
Thankfully, the fight is on.
New York City mayor Mamdani has captured widespread attention with his plans for public grocery stores, and new federal New Democratic Party leader Avi Lewis is making public grocery stores a key plank of his platform.
Lewis compares the fight for public grocery stores and food distribution to the struggle for public health care, which his grandfather David Lewis helped advance during his pivotal years with the Co-operative Commonwealth Federation (CCF) and NDP. It is a tall task to replicate the success of Canada’s public health care system and the decades of blood, sweat, tears, and political effort that went into building it.
For Mamdani and New York City, the plan is to begin with five public grocery stores, but this is in a city of more than eight million people. As with any major public project, scaling it up will take time, likely extending well beyond the tenure of any single mayor. The fight for public health care began in the 1940s and was not fully realized until in the early 80’s.
Manitoba NDP Premier Wab Kinew—whom ACORN’s Judy Duncan and I ran into at a Travelodge continental breakfast last year while grabbing hard-boiled eggs before he headed to Brian Mulroney’s state funeral—is taking legislative action to void restrictive covenants that punish poor people, create food deserts, and are every bit as harmful as they sound. While less famous and more technical than public grocery stores, stopping grocery giant REITs from dictating where and when food can be sold would have an immediate and substantial impact on low- and moderate-income families and is something that should be replicated everywhere.
Canada’s lax regulation of the food industry also extends to the penalties grocery stores face when caught mislabeling or short-weighing products—claiming an item weighs a pound when it does not, for example. It turns out this practice is surprisingly common. The penalties imposed on grocery giants for these violations are often only in the thousands of dollars, which amounts to little more than pocket change. In the United Kingdom, penalties are often based on a percentage of gross revenue, hitting companies where it actually hurts. That is something Canadians should be clamoring for.
Whatever angle you take, the fight against grocery gouging is on. In Canada, there is plenty to fight for—and many victories within our grasp.
John Anderson is the Field Director for ACORN Canada and over two decades has played key roles in building ACORN across the country.