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Chains, Consolidation & Competition

Canada’s Evolving Retail Landscape

Canada’s retail environment for produce is highly consolidated among a handful of supermarket and discount chains, and competition is fierce both across the nation and within the provinces.  Retailers, both chains and independents, vie for a total of just over 34 million people—the equivalent of 11 percent of the U.S. population—spread across a geographic region slightly larger than its neighbor to the south.  

Ron Lemaire, president of the Canadian Produce Marketing Association, characterizes it as “a small per capita market,” with “relatively few retailers fighting for [their] share of stomach.”  Svetlana Uduslivaia, senior market research analyst at Euro monitor International, agrees: “It’s a very saturated, very competitive marketplace at this point.” 

Highly Concentrated

All told, nearly 21,000 stores in Canada sell food, according to Statistics Canada, with total food sales reaching CAD$87 billion for 2012, representing 19 percent of all retail sales. Grocery stores and supermarkets dominate the market, accounting for 63 percent; yet discounters, club stores, and other outlets have slowly gained market share, climbing by several percentage points over the last two years. 

The three major players—the national chains, Loblaw and Sobeys, and the big regional chain, Metro—account for 43 percent of retail food sales.  These three, plus Costco and Walmart, continue to dominate the market and drive trends nationwide. Several have been adding floor space to their produce departments as a means of remaining competitive.

Although multinational retailers have not made as many inroads as in the United States, the global discounters and mass merchants that are in the Canada market—namely Costco and especially Walmart—are having a major impact.  Costco has been in the country since 1986 and has 75 warehouse clubs, while Walmart entered in 1994 and has over 330 outlets, more than half of them supercenters with fresh produce. 

Uduslivaia says both chains are “very strong competitors,” which was further underscored by Walmart Canada’s announcement in January that the company would spend $450 million to open three dozen new supercenters in Canada, through both new construction and renovations to existing facilities.  The investment will not only add nearly 1.5 million square feet of retail space but provide what the company believed would reach 7,000 new jobs. 

Some of the new stores were planned for the Maritimes, marking Walmart’s first supercenter foray into the eastern section of Canada.  Walmart Canada’s president and CEO, Shelley Broader commented: “We’re truly delighted to be adding a full grocery section to more locations across the country, including the opening of our first supercenters in the Maritimes.  We look forward to helping our customers coast-to-coast save money on groceries as well as their general merchandise purchases,” she said.